'Taxi wars' in France as new businesses try to compete [video]
bbc.co.uk
bbc.co.uk
Our taxi licenses are cheap, but supply is artificially restricted. The Ministry of Interior decides how many taxis can operate in each town. Taxi licenses cost about 300 euros; processing expenses. Toughest prerequisite is a short (few weeks, cost less than 1k euros) taxi-entrepreneur course.
The Ministry of Interior resorts to micromanagement. They set the maximum number of licenses for each and every town based on estimated need (which is quite sensitive to lobbying). For example the current maximum number of licenses in Helsinki is 1386 (for a population of 590k). In 2008 100 new Helsinki-licenses were issued, and just as anamax commented above: It was protested with an argument "Cabbies don't make a "living wage" as it is". This number was reduced by 51 in 2010.
There are queues, but they are generally not very long (in Helsinki you might need to wait for 10 years, but many smaller towns have free spots which you can claim without delay). You can drive a taxi as a hired man as the license is vehicle-, not person-specific. Hired man gets paid about 30-40% of the turnover of his rides.
Both the number of licenses and fare rates are national monopolies. A ride of similar length costs the same in Helsinki as it does everywhere else. Rates are set by the Ministry of Interior.
No price competition and artificially restricted entry to market. Friction with modern society: heavy. Taxi monopoly might not be the first to fall, since we still have, e.g. state monopolies on gambling and liquor. Of these, the former could end soon thanks to the EU.
The whole thing was/is known as "Operation Escargot" -- Operation Snail.
I hope I have to eat my words one day, but I just don't see how any law involving "competition" in the Paris taxi scene could ever pass. Even small increases in the # of licenses will lead to taxi strikes (or the threat thereof), and the government/city back-off very quickly whenever that happens as you can imagine. The only way for it to happen would have to be through an out-of-France process, such as Euro-level (de)regulation or a competition proceeding (antitrust).
I'd love some more background for the video and any suggested liberalization of licensing (perhaps there is only minimal licensing requirements in Avignon in the first place, compared to Paris, e.g.).
edit: added "Paris" at the end of the last parenthetical.
Easy. If taxi drivers illegally obstruct public roads by "blockading", arrest and prosecute them. This is crime, not political speech. It is a broken political system where a minority can force an outcome by intimidating the public with violence.
Taxi licenses are outrageously expensive. A driver in Paris told me his was 190,000 euros, and it can get even higher in touristic towns on the Mediterranean coast: http://www.licence-taxi.fr/prix-licence-de-taxi.php
They are considered legitimate investment vehicles (pardon the pun) with all the typical market phenomena (speculation, etc).
http://www.characterandwealth.com/public/253.cfm
http://en.wikipedia.org/wiki/Taxicabs_of_the_United_States#C...
I did some Googling and found some discussions about licensing liberalization in France but no specific mentions of how/when it was implemented (if it ever was).
It wouldn't surprise me if it were, though, since here in the UK getting a license isn't particularly tough (added: with some notable exceptions, see reply posts).. so maybe there's some EU harmonization going on in this regard.
What about "The Knowledge" required for London black cab drivers - which apparently takes between two and four years of study and exam attempts to pass:
http://www.tfl.gov.uk/businessandpartners/taxisandprivatehir...
[Edit: I sometimes wish they had something like this in Edinburgh - I've had to tell taxi drivers here where to go a few times and the taxis here are very expensive compared to Glasgow and London].
Of course, this law is widely ignored -- which is just as well if you want to get home at 3 am.
Sometimes I think about what would be a fairer scheme than locking away a medallion for life? One possibility would be to have 5-year Dutch auctions of medallions. This way the City keeps getting value out of the medallions, and can increase the supply as the population grows.
Or you could stop pretending the government can legitimately criminalize a harmless business activity at the behest of a rent-seeking cartel. Money is not obscene. Driving a customer from A to B in exchange for payment is not a crime.
I agree with you, to some extent. However, some level of regulation is necessary, otherwise "harmless" can quickly become "harmful". The case of South Africa is instructive.
In South Africa, the Apartheid government entirely deregulated the minibus taxi industry in the late 1980's. It was to be a cheap source of transport for the black population, since public transport links, particularly in newly established "white flight" areas were very poor (whites tended to have cars, blacks didn't). Also the idea was that individual taxi owner/drivers would help foster black entrepreneurship.
The best description of what happened next I've read is "the miracle of the 1980's turned into the nightmare of the 1990's". Instead of one-man one taxi, we got one owner, with many taxis. Taxi owners formed cartels, and violence in competition for routes led to murderous street warfare ("taxi wars").
The weakened state (1990-1996) was unable to intervene. Starting with the Mandela administration, attempts were made to re-regulate taxi operations, but were consistently stymied by the taxi organisations. Even as recently as the last 2 years, taxi owners, through road blockades (and a fatal shooting) managed to strong-arm the government into giving them control of a new Johannesburg bus system.
In any town and city in South Africa, overloaded, barely roadworthy taxis blast through intersections disregarding traffic rules, stopping dangerously, their drivers desperate to increase their takings, menacing their own passengers and other motorists with their aggression. Fatalities are not uncommon.
That said, I don't understand your reasoning. You claim that free-enterprise taxis are responsible for violence in SA. But if that government, according to your account, can't even maintain basic road safety, how could they possibly enforce a taxi monopoly? If they tried to set one up, they'd simply create a black market of cabs, which they'd have no control over. If anything that should be worse; "illegal" cabs would evade police and would not undergo whatever licensing/safety checks ordinary cabs get.
(On a tangent, a state-enforced cartel is quite analogous to the dystopia you describe. Instead of private businesses using mob violence to "defend" "their" turf, the police enforces it for them. Same crime, only institutionalized, sanitized, and socially acceptable.)
And the state is stronger now than it was in the past, but the legacy of deregulation lives on - getting the genie back into the bottle is harder than letting it out.
Same crime, only institutionalized, sanitized, and socially acceptable. "Sanitized and socially acceptable"...sounds good to me.
But: given the fact that we _do_ have some sort of a licensing scheme (medallions), it would be better to have short-term leases, than lock away a medallion in the pocket of some well-connected dude who makes a killing renting it out.
That's a pretty laughable scare-story if you think about it. Streets literally clogged with taxis? They'd be out of business long before that.
Price controls do not work. There is no legitimacy for central planning in business activities, least of all in a nominally "free" country.
"The idea in general is to have more people using public transportation, as it is healthier and better for the environment."
No it's not. If it were, they would be criminalizing personal cars just like taxis. They're not. It's purely about enforcing a lucrative cartel.
(Not replying to the implicit suggestion that government should criminalize any sort of transport for "environmental reasons". I used to think that was a right-wing strawman...)
"But: given the fact that we _do_ have some sort of a licensing scheme (medallions),"
Medallions aren't licensing, they are cartel enforcement. They are about maintaining a price-controlled, quota'd monopoly for a politically-connected union class -- as opposed to inspecting, training, and certifying drivers and taxi cars for safety. They are orthogonal concepts.
"Medallions aren't licensing, they are cartel enforcement. They are about maintaining a price-controlled, quota'd monopoly for a politically-connected union class -- as opposed to inspecting, training, and certifying drivers and taxi cars for safety. They are orthogonal concepts."
But your cousin can come and make the same argument you are making about inspecting/training/certifying drivers: that it is to maintain a 'cartel' and deny access to other drivers. Who will do this inspecting, etc.? The same government that you are scoffing at?
What's to stop cartel taxis from cutting costs in the same way? I don't see the connection.
And the glut of cabs will cause a downward spiral in quality of service. Why maintain a clean cab when it cuts into the profits, and your competitor is not doing so?"
Brand value? Also, so what? So what if people who care about their wallets prefer a cab that costs half as much, even if its not as clean and shiny as your price-inflated central planning solution? (And it's not just taxis -- private mass transit, like vans, directly competes with taxi cartels and are likewise assaulted by monopoly enforcers. Price matters.)
"But your cousin can come and make the same argument you are making about inspecting/training/certifying drivers: that it is to maintain a 'cartel' and deny access to other drivers."
Because the intent of inspection, education, and certification is emphatically not to maintain a cartel, and unless the regulators are more-than-usually incompetent it will not cost anywhere close to e.g. $930,000 per person [1]. Nor would that entail explicit quotas/supply caps.
The intent of the medallion system is explicitly and openly to act as a supply cap, to artificially inflate wages in the taxi industry. It has nothing to do with safety regulation, and it is silly to pretend you do not see the difference.
[1] http://www.businesswire.com/news/home/20110505006101/en/Meda...
"The same government that you are scoffing at?"
I'm not scoffing at government; I'm scoffing at a particular government policy which is corrupt, unjust, and an insult to freedom.
How dare you suggest that we increase the number of cabs? Cabbies don't make a "living wage" as it is, so the number must be restricted. (That's how the political campaign to defeat such measures works.)
The firm I use whenever I'm in London offers them, I assume that no experience with motorbikes is needed to be able to sit on the back of one?
Edit: Just rang up to find out about rough prices, the journey I most commonly take is £11 in a normal car and £25 on a bike. So only really worth it when there's going to be bad traffic (which admittedly is quite often in London) or if you really like riding on a motorcycle. Can't remember how that compares to their more expensive car services, I rarely use them (99% of the time I'm on my own for work or with friends, exec cars only when with a client for some reason.)
Will probably give it a go next time I'm there just for the hell of it. At least then I won't be tempted to read Add Lib.
I forgot to mention the trikes in the Philippines http://www.youtube.com/watch?v=K3SbC7Uh_bI&feature=relat... You're very low to the ground and can be somewhat scary, but they get you from place to place rather quickly and you don't have to suffer the jeepney.