I notice a bit of mutual back slapping in another place over the 'find' of an overseas paper relating to taxi deregulation and its ill-effects.
They seem to be treating this as the discovery of the Holy Grail of taxi deregulation.
Sorry lads but you forgot to read even the title properly - it's about deregulation; that's proper deregulation, namely the removal of fare and quality controls and not just derestriction of numbers.
We've certainly never argued for deregulation, using the term in its more correct sense.
This 'find' mentions a decade-old paper by Professor Paul Dempsey (Professor of Law and Director of the Transportation of Law Program at the University of Denver) called Taxi Industry, Deregulation and Reregulation: the paradox of Market Failure.
Again, the term 'deregulation' should be emphasised.
Also, in relation to this paper, in Myth and Reality we said:
However, these studies were about more than the removal of quantity controls proposed by the OFT – these concerned the more comprehensive removal of government controls, including tariff regulation. However, given the uncompetitive nature of taxi markets, particularly that the customer generally takes the first cab at a rank or hailed in the street, there is obviously an incentive to raise prices, hence the rationale for controlling fares in the first place. Thus it is not surprising that these studies often demonstrated rising prices after deregulation. However, the OFT did not recommend fare deregulation (and indeed endorsed continued tariff control), therefore these comparisons are totally irrelevant. Moreover, the earlier discussion on quality regulation hopefully provides evidence on the merit of this aspect of government control.
As is usual, these studies also call into question the authors’ knowledge of the taxi industry. For example, Professor Dempsey uses the essay ‘The Tragedy of the Commons’ as an analogy for taxi markets. The essay outlines how overgrazing of a common pasture leads to its demise, and this scenario is used to demonstrate the need for regulation of access to taxi markets. However, while the analogy might be appropriate for a replicating resource that could be eradicated if access to it is not controlled (such as fisheries) it is difficult to see how it applies to taxi markets – custom for taxi services will not disappear whether access is controlled or not, and to that extent the taxi trade is similar to any other service industry. Taxi driving in unregulated/lightly regulated markets may be a low profit/wage occupation, which may be what Professor Dempsey is alluding to, but surely this is a totally different issue to that in the Commons.
Given the way these people slag our site, you would think that they would have actually read the stuff that we have produced.
Alternatively, they maybe just think that if they post weighty-looking stuff like that then it might impress casual readers.
Well it might, but it's a myth, you can read the reality on TDO
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