A Bad Day To Get Sympathy From Me Over This

Apparently, Washington DC politicians think that it is an economic disaster that there are ... too many competitors in the taxicab business.

The District's open, all-are-invited taxicab industry is so saturated with drivers that the entire enterprise is threatened, according to a D.C. Council member who has filed a bill to cap the number of cabs allowed on city streets.

Ward 1 Councilman Jim Graham introduced legislation Tuesday to limit the number of taxicabs in D.C. through either a medallion system, like ones used in New York City and Chicago, or a certification system.

The soaring number of taxicab operators in D.C. "” roughly 8,000, most of whom own their own cars "” is a "pressing and urgent problem," Graham said. There are more licensed drivers in D.C. per capita than any place in the world, he said, and new applicants continue to take the required class, giving them access to the driver exam administered by the D.C. Taxicab Commission. A glut of drivers could jeopardize the chances of any cabbies making an adequate living, Graham has said.

After spending an entire hour trying to get a cab in the middle of a sunny day in Paris, I have not very sympathetic.  Another example of how government licensing is almost always aimed at protecting incumbent businesses from competition, rather than helping the consumer.

  • Kevin Jackson

    It would be nice to see some evidence of the disaster Graham is predicting. Because the only evidence I see is that people are taking the time (and presumably money) to get into the business, even when they have to take a course, test, and own their own vehicle.

  • http://evilredscandi.blogspot.com Evil Red Scandi

    You took a taxi cab in Paris? I was there on business for about a week last year and we just took the metro everywhere (and shuttles to / from the airport). Never saw the inside of a cab.

  • rxc

    Finding a cab in Paris can be tricky if you don't know the system - there are fixed taxi stands where they wait next to phone posts that you can call to summon one. You have to go to the taxi stand or make a call - they do not cruise for pickups. And, the meter starts when you make the call for a taxi, now when they pick you up. Finally, you were in Paris in July, after the start of the summer migration, when the supply of public resources in Paris drops considerably as people leave. You are lucky you were not there in August, when the only people in town are the tourists and the few, unfortunate, unhappy left to serve the tourists...

  • Russ R.

    Does the city regulate taxi pricing?

    If so, the "soaring number of taxicab operators" suggests that pricing is set too high.

  • http://unintendedeconomist.blogspot.com/ TomB

    The city does regulate the price of cabs. Cabs here in DC are more expensive than anywhere else I have been in the U.S. There used to be a "zone system" where you were charged by how many zones were between you and your destination. There were about 2 dozen irregularly shaped zones (roughly corresponding to sectors of the city, i.e., the monument zone, Georgetown zone, some residential zones, etc) which made figuring out how many of the labyrinthine zones you had been through very difficult - even for city residents. I have been in many heated arguments with cabbies over just how zones we went through, e.g., whether he picked me up on the zone 1 side of the street or the zone 2 side.

    Sometime in the past year or two they switched to a meter system, but the drop is $3. And they charge you an extra $1.50 per passenger. Plus occasional gas surcharges and the $1 rush hour surcharge. So if two people get in a cab at rush hour, the meter starts at $5.50.

    Cabs are expensive here, but it is kind of nice. I like the glut of supply. I rarely have trouble finding a cab, even though the ride is expensive. I don't take cabs every day so the money is not much of an issue. Plus many cabbies own their cabs so frequently they are in good condition.

    But the DC City Counsel is a total clusterf#ck - there is not a better description. It is also 100% Democrat, despite 1 member being an "Independent." I think Marion Barry is still on it...

  • Tom G

    I think I read recently of the alleged awful scourge of gypsy cabs in NYC. Again, it is NOT consumers who are complaining AT ALL. It is government, worried and wringing their hands over imaginary problems. In cases of genuine theft, fraud, price-gouging (if real), we already have solutions available. Government just wants control over the whole situation and uses imaginary threats to consumers to justify taking the control and setting the terms of trade.

  • William Leitold

    I live in NYC for the last 27 years. During that time the price of Taxicab medallions are up at least 500+%. Taxi drivers have not seen much of that increase, since the market clearing price for drivers remains unaffected by the endless fair hikes and surcharges; the additional cash flows have simply raised the capital cost of the medallions (the right to run a taxicab). Currently I’m the admisntrator for the estate of a 26 year old killed by a NYC taxi last summer. Insurance coverage is limited to $300K per occurrence and $75k per person, each cab is separately incorporated to prevent any further access to assets for additional liability; these are shocking numbers in a society in which middle class parents will spend probably $500k raising and educating a child through college. You might ask how NYC came to such a state of affairs, after all this is a city where million dollar compensation package are not unusual. The answer is that the value of NYC taxi medallions is closing in $750k, so these medallion owners creates a powerful constituency of rent seekers who are busy buying from the political class a long list of favors. Thus when your local DC council person proposes to institute a system like NYC they know quite well that this will create a lucrative source of new tax revenues, but even more important a powerful source of campaign contributions, new bureaucracy patronage jobs with regulators, medallion brokerage busineses along with their finance, and finally out right bribes and kick backs as this business is increasingly controlled by governmental affairs regulators (one of Jim Graham’s bailiwicks). In short, this proposal is all the evidence anyone would need to know that Ward 1 Councilman Jim Graham is quite willing to be corrupted.

  • Doug

    "A glut of drivers could jeopardize the chances of any cabbies making an adequate living, Graham has said."

    Reminds me of Yogi Berra's "Nobody goes there anymore. It's too crowded." If you can't make a living, why is there a glut?

  • http://phantomcabdriverphites.blogspot.com/ Ed Healy

    What does the number of cabs in DC have to do with your inability to get a taxi in Paris? And, was it raining?
    Actually a number of Cities - under the influence of Reagan and his pals - deregulated their taxi industries during 1970s and 1980s. The prime example was Seattle. All these Cities soon gave up the the experiment because most of what happened good for neither the customers nor the drivers.
    Yes - the cars were in bad shape. Yes - some customers were robbed. Yes - many, many customers were over charged and taken for rides or other wise cheated. And, since there was no regulation. who could they complain to?

    The most interesting thing to me was that the price of the average ride when up instead of down. With the drivers able to charge whatever they wanted the customers had the choice of paying it or tying to negotiate every ride with three or four taxis. Usually the customer would pay whatever the driver wanted.

    There have been numerous studies made on this subject: For an academic look try http://www.nctr.usf.edu/jpt/pdf/JPT%208-5%20Schaller.pdf
    http://www.taxi-library.org/revdoor.htm
    http://econpapers.repec.org/article/eeetrapol/v_3a14_3ay_3a2007_3ai_3a6_3ap_3a490-506.htm

    Of course bitching is much more fun

    Ed