Studies
Organization: Frontier Centre for Public Policy (Saskatoon, SK)
Charticle: 2009 February 09
Link: Charticle (complete document)
Excerpt from the Charticle:
While regulation can theoretically solve problems of market failure, evidence from the Canadian taxi markets suggests that regulatory capture has taken place. Regulatory capture occurs when the regulatory process is disproportionately influenced by a small but motivated group at the expense of a larger but less interested group. In the case of taxi regulations, incumbent license holders may benefit from having access to a market that is protected from new competition, however the public suffers from a shortage of taxis.
Organization: Frontier Centre for Public Policy (Saskatoon, SK)
Equity, efficiency and getting a cab when you want one (2009 February 12)
Link: Policy Paper (complete document)
Executive Summary:
· Recent media reports in Calgary, Saskatoon, Winnipeg and Halifax pointed to dissatisfaction with the taxi services in those cities.
· Regulated entry into the taxi market has kept taxi numbers lower than might be expected. If taxi numbers had grown in proportion to the rest of the workforce for the last 20 years, there would now be 2,495 taxis in Calgary instead of 1,411; 222 in Saskatoon instead of 160; and 496 (standard licences) instead of 410 in Winnipeg.
· Areas that removed regulations found their taxi markets grew much faster than other parts of the economy.
· The cost of taxi licences has risen dramatically due to artificial scarcity. The average price of a licence in Saskatoon in 2008 was $79,565, which gave a total value of almost $13-million. Assuming these licences give equal or better returns when compared with other investments (the 30-year average return for the Toronto Stock Exchange is 10%), licence holders in Saskatoon extract over $1-million per year in monopoly rents. In Winnipeg, this number is approximately $92-million aggregate value for $9-million per annum monopoly rents.
· Empirical evidence from economists suggests that allowing operators who meet basic safety and competence requirements to operate in the taxi market and set their own prices would lead to better service, cheaper fares, shorter waiting times and more employment for would-be drivers who currently cannot afford a licence.
Article: Regulation or Deregulation? Entry Controls in Taxi Regulation, Bruce Schaller, Principal, Schaller Consulting
Link: Article
Full Paper: Entry Controls in Taxi Regulation: Implications of US and Canadian experience for taxi regulation and deregulation, Bruce Schaller, Principal, Schaller Consulting
Link: Paper
Excerpt from the Article:
A major challenge for officials charged with regulating taxi entry is to reconcile the disparate needs of dispatch and cab stand/street hail markets, particularly in places with substantial trip volumes in both markets. Approaches to this challenge include two-tier systems, flexible forms of entry control, company-level entry qualifications, geographic restrictions and service requirements. These approaches and implications for regulation are discussed.
These cities often experience shortfalls in service in outlying areas, however, as cabs cluster in active downtown and airport cab stand/street hail markets. To achieve geographic balance in service levels, cities may adopt:
- Geographic restrictions, such as cabs not allowed to pick up in the Las Vegas "Strip", or franchise zones used in Los Angeles. (Other examples: Miami, Chicago, Orange County/Anaheim, and airport restrictions in Orlando, Ottawa, Toronto, San Jose, Seattle, San Diego, St. Louis.)
- Service requirements, such as companies or drivers required to serve a certain number of trips in underserved areas. (Example: Chicago.)
- Two-tier industry structures, in which separately licensed industries are authorized for cab stands/street hails and for dispatch. The number of cabs authorized for stand/hail work is regulated; the number of vehicles operated by companies licensed for dispatch only may or may not be regulated. (Examples of two-tier industries are New York City, Newark and London.)
Effectiveness of these measures are discussed in more detail in the full paper.
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