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Time to Park Taxi Regulation

December 28th, 2009 Posted in Uncategorized by

From an excellent article in yesterday’s Times. Phillip Stevens explains how unnecessary regulation may be adding extortionate amounts to your fare home:

There are two fundamental reasons why the taxi market isn’t working.

In the mid-19th century, laws were passed to limit town centre congestion by horses and carriages. Many local authorities still use these laws to restrict the number of licences granted to taxis, which results in fewer taxis on the road than are needed — explaining the long queues at taxi ranks in certain towns on a Saturday night.

Second, the fear of unscrupulous drivers extorting hapless passengers has resulted in highly regulated fares. Instead of relying on competition, as is the case for most other services, local authorities set fares with the taxi industry. The needs of the travelling public are secondary in these opaque discussions.

With too few “rank and hail” taxis on the road, all of which charge too much, what can be done? We need a free market in taxis, in which any individual or company can offer a service, providing they can show the driver is safe and the vehicle roadworthy. The distinction between “rank and hail” and phone-only minicabs should also be abolished.

The article is well worth a read. Great stuff from the people at IPN.

2 Responses to “Time to Park Taxi Regulation”

  1. tim leunig Says:

    Hmm. I think max fares have a role, notably to stop tourists getting ripped off. Having been charged £70 for a 10 mile ride in Sweden recently, I am sensitive to this!

    Most of the article is already achieved via mini cabs – most of the poor and elderly use them rather than hail and rides. And allowing more taxis is really unlikely to lead to lower car ownership, when minicabs are already deregulated.

    Don’t get me wrong, I support ending numerical restrictions on taxi licences, agree sat nav means the knowledge is no longer needed, and think that there should be price competition. But it won’t change a whole lot of things – taxi drivers are not that rich, and the margins to be squeezed are relatively small.

  2. Paul Pettinger Says:

    Phillip Steven’s suggestion that taxi firms bid for a customer’s fare remotely is a lovely idea, but rather fanciful. As the article goes onto say, most authorities do not limit the number of taxi licenses they issue. On the authority I served on from 04 to 08 we didn’t have a waiting list for licenses, but were able to ensure that the application from a convicted rapist was turned down. The answer seems is to issue lots of licenses, not scrap the regulatory system.