If the trains aren't cheaper, why should that be the cars' problem? Why not make the trains a better alternative instead of making cars worse?
Why would you advocate something that "seems draconian" to you?
If you'd ever been to Bangkok you'd know why it needs fewer cars. Pollution is terrible, and traffic is appalling - often a journey which should take 20 minutes takes hours, and safety standards are very low - the most popular form of taxi is a pick-up truck with bench seats in the back which is really unsafe in the event of an accident. They desperately need to encourage more public transport and get rid of some of the cars/trucks on the road to prevent rush-hour gridlock and massive pollution.
The easiest way to clear up the roads for public transport is to make driving more expensive and use some of that money for improvements in the public infrastructure. I doubt they'll ever do it, but they could do worse than follow the example of London with a congestion charge for central areas, and use the money to subsidise public transport, which is underused at present (because the train is so expensive, and the buses are so slow due to all the other traffic).
Driving is already fairly expensive in Thailand: cars and gas are both pretty expensive. Taxis in Bangkok are much more expensive than they are where I live (tourist areas are even worse with their taxi mafias). Bangkok already has a public transportation system that is much better than other cities in the area (barring Singapore), they aren't doing that poorly.
The public transport there is good (what there is of it), but the BTS and MRT are both expensive and therefore underused by anyone other than tourists and business people - most people don't use it and it's not as extensive as other cities. At least when I've been there the skytrain is remarkably quiet compared to the streets given how quick and easy it is. It's a shame they won't tax the cars more in town and use the money for improving public transport instead IMHO, and Bangkok is a terrible example of a place which needs less regulation - they need far more regulation on their taxis and traffic in general in order to manage it as at the moment it is bedlam at rush hour, partly because of all the taxis, motorbike taxis and trucks. It is a great example of the free-for-all which results from unregulated capitalism though.
Beijing cut the subway to 2 yuan during/after the olympics (it was 4 yuan before and even in 1999 it was 3 yuan). The result is that the subway is very elgalatarian and very packed; I avoid it for the taxi accordingly (spend about 80 yuan a day on taxis). But Beijing traffic is also worse than Bangkok's, and there is more regulation (no private minibuses, not many tuktuk that are useful). Whatever they do, the answer to our problems probably isn't more taxis but public transit is also a problem (for the middle class).
I like Japan the best, where the transit is affordable, convenient, and mostly comfortable (when not rush hour).
In Zhuhai (near Guangzhou) there are far less taxis on the street than demand would dictate, however plenty of citizens drive around offering people rides at similar rates and everybody uses them, locals and foreigners alike. It is obviously illegal but it is so widespread and common (happens right in front of you and the police on every major street all day) that it is clear the police aren't doing anything about it.
That system is very Chinese. They make laws that would seem to restrict business and then local officials tell the police to ignore them when they deem their area is better off without them. Unfortunately this also extends to things like drugs and even kidnapping in some areas. No system is ever perfect.
The pollution argument is valid and is a case of "tragedy of the commons", but the traffic argument isn't.
The shared resource in this case is traffic capacity.
It's proved ineffective to regulate traffic by making cars expensive in this market. That's because cars are not profit centers for people -- they give mostly intangible benefits (increased comfort, status, etc). Taxis on the other hand are cars that are used for profit and therefore will respond efficiently to regulation (if that regulation increases capital or operating costs).
What's your model here? That if there were fewer cars on the roads of Bangkok, it would be able to support more cars? What would there be more of, in total, if you confiscated a bunch of people's cars?
Would you advocate banning most people from a popular public beach on the grounds of overcrowding? Would you justify that as preventing a "tragedy of the commons"?
Congested traffic makes everyone's trip longer and less convenient. Any individual gains from using a car as opposed to not using a car as long as the traffic is not congested. Too many individuals doing what personally benefits them make it worse for everyone. This is the definition of tragedy of the commons. In the sheep example, every shepherd benefits from using the field, but if too many sheep use the field, it's ruined and noone can use it. Same with congested traffic.
Again, I just hopped into here, and haven't much evidence to back that up, but it's the sort of thing that seems likely.
As you continue to add cars, you reach a point where cars start to slow down, but throughput continues to go up. Once you reach a certain point, people begin to drive slower due to congestion. But at low levels, this is offset by the additional number of people using the road, resulting in greater total throughput.
Past that point, you reach another point where adding more cars does not increase throughput, as the added cars are balanced by the slowing of traffic as a whole. Beyond this point, adding more cars reduces the throughput of the road. Take this to the extreme, and you have a giant parking lot with people gradually inching forward, and people/cars per minute excruciatingly low.
No sources, but I'd think this is all fairly obvious.
Road. Fewer cars on the road would mean a more constant speed for the cars on the road.
"Would you advocate banning most people from a popular public beach on the grounds of overcrowding?"
You generally don't have to. Since the benefits of going to the beach are relatively low, people more efficiently self-regulate their usage. That is, if a beach is too crowded to put down a towel, you'll probably leave.
That's not the case with taxis. As long as buying taxies and renting them out is profitable, taxi operators will continue to do so. To make things worse, the profitability of driving a taxi is only indirectly related to the profitability of renting that taxi out. The cost of rental is relatively stable while the money made by the driver varies considerably. The drivers absorb short-term (even medium-term) fluctuations in the market.
Car is not the goal. There are other means to move people way more efficient.