TCS Daily

Taxi Cab Obsessions

By Fredrik Segerfeldt - September 28, 2006 12:00 AM

Early last spring, I invited my new girlfriend to Rome for an extended week-end. For Scandinavians still trapped in a six months long hibernation, being able to sip campari and orange juice on the sidewalk in March sunshine is a real privilege. And of course the supply of romantic spots to court a lady seems almost unlimited in the Italian capital.

One evening, we decided to leave the central tourist areas and explore the bohemian neighborhood Trastevere, filled with cozy candlelight trattorias. I made real progress in my seduction efforts. Everything, from the setting to the food and wine, was superb. We left the restaurant, to get a taxi to the hotel, a few miles away.

Now our trouble commenced. Even though this was a Saturday night, there were just no cabs around. We waited and we walked, we walked and we waited. Our mood started to get sour. We made phone calls and talked to bar owners, but the locals just shrug their shoulders.

'Trying to get a taxi in Rome on a Saturday night, are you out of your mind?' people seemed to say.

Having been unable to grasp the local public transportation system, we started to walk towards downtown. There have to be taxis there, we thought. My girlfriend, trying to match the Latin elegance of Italian women, wore high heels and a tight skirt. After a mile or so, the unforgiving cobblestone pavement started to hit in. Annoyance rose. Romance was all but gone, just getting home was on our minds.

After half an hour or so, we reached some kind of local transportation hub. We managed to identify a line of a dozen or so people, apparently waiting for taxis to show up. It was around midnight, in a capital of one of the most advanced (G-7) countries in the world. We stood in line for two hours.

During the full two hours, I kept whining about regulation. There is no other reason for there not being any cabs around. I would pay a hundred euros to get back to the hotel real fast. There has to be some monopoly, price regulation or government licensing limiting supply. I remembered what the situation was like in Stockholm, 20 years ago, before the market was deregulated. Instead of taxi drivers queuing for customers, like they are now, customers queued to get a cab ride.

My girlfriend, not being a policy wonk, told me to shut up. Trying to grasp the last leave of seduction still in the air, I decided to bite my tongue. Finally we got the ride, and even though it severely reduced the quality of that week-end, the incident soon sunk into the background of my mind. I never explored the Italian taxi licensing regime.

But then, this summer, it all came back to me, when I read that cab drivers in Rome went on strike against the government's attempts to induce some kind of competition in their industry. As part of a larger liberalization package to revitalize the saggy Italian economy, the government wanted to expand the number of taxi licenses. We are not talking complete deregulation or free competition, only an effort to cut at least some part of the mismatch between demand and supply. But the state-sponsored cartel defended its privilege tooth and nail.

Isn't this what continental Europe is all about? Cozy spots and romantic opportunities on the one hand, and formidable vested interests and senseless government regulations on the other, the latter severely clouding the former. Imagine the amount of love we would see in a Europe of free markets...

The author is a director at the Swedish think tank Timbro.



Please tell me it ain't so
We are planning a Euro trip (using the Euro Rail Pass) next summer.

Euroland is like that
And the States keeps trying to get more like that. Since europeans are mostly socialist, they believe in control, more than freedom, economic or other suchwise. So in Denmark(at least a few years ago, maybe still) if you move apt or house , you have to go to the police station and register in some 'Volksbuch', maybe they forgot that the freggin ***** left the place about 50 years ago. Then in germany if you're a young guy who wants to start a little business doing something that you're good at, or like, perhaps mechanic, roofer, carpenter, etc. you're still not allowed to just go out and do it like you still can in the STates. You have to take some stupid exam like a 'Mesterbrief' I think they call it. And of course it's controlled by the unions or guilds so that not everyone can do something like that. Socialsts are interested in controll, not freedom.

A. Rome is my favorite city on the face of the Earth.
B. Roman taxi service has always been a pain in the butt.
C. Fares have always been a rip-off.
D. Thank God that Rome is a "walking city."
E. With the way Roman taxi drivers drive (sometime on the sidewalk -- I've been there) maybe they were lucky not to have gotten a taxi.


Regulation in the Philippines
In the Philippines, most people don't own a car and public transportation really doesn't exist. So, they have a large jeepney service industry.

What is a jeepney? Here's the wiki on it:

Anyway, when I was visiting there one time, the jeepney operators went on strike for fare increases. See, the whole industry is regulated -- how many licenses are awarded for what routes and what the fee (its uniform) will be, etc.

So, basically what happened was: The overly powerful bureacrats who hand out the licenses sold them to the highest briber. Next thing you know, there's too many jeepney operators in the market (a glut). But, because they could not compete on price, they started going out of business.

So, the real reason for the strike for the fare increases was for them to make up for their lost customers by earning more per remaining customer that they can get. Eminently sensible for them to push for that, to be sure.

But when I would mention to Filipinos there the view "Well, why don't you get rid of the regulated fees and let the market work itself out?", boy did I get some reactions. I felt like I was time-warped to Roosevelt's New Deal America.

TCS Daily likes to rail against the regulatory snafus of the rich countries (like Roman taxi regs). But let me tell you, the real damage is being done in the Third World. Everyone likes to concentrate on the corruption as the main cause of their poverty. But the corruption isn't the cause, per se. It is the governments that make corruption all but impossible to stamp out through their unaffordable nanny-state regulations that is the cause.

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