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Originally Posted by floobie
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I commend the city's action on this, but Mayor Nenshi's a smart guy, surely he must know that this is a half assed solution that will do nothing to solve the problems in Calgary's taxi market.
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Originally Posted by da mayor
Evidence shows that pure deregulation of this industry rarely works in the developed world. In addition to making it difficult to protect the safety, cleanliness and effectiveness of the system, the economics of supply and demand can result in a system where it is difficult for drivers to earn any money, so they exit, resulting in fewer cabs than before.
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False, 10 minutes of research yields plenty of examples where deregulation has improved the number of cabs, the level of service, and market innovation. New Zealand has enjoyed fantastic results from deregulation, along with Singapore, Japan, and Ireland. All developed nations. Perhaps Nenshi is simply looking at the U.S., where deregulation has failed because it did not go far enough. Most American cities maintained regulations that favored existing cab companies and others continued to regulate fares while eliminating the cap on licenses. This cannot be considered true deregulation.
With regards to safety and cleanliness issues, these can be mitigated by a far simpler licensing system that ensures cars are in working order and drivers are competent. As for his point about drivers exiting the market due to lower earnings, I don't buy it. Drivers who own their own medallion right now earn a very comfortable living (my friends dad was a cab driver/owner and he was able to provide an upper middle class lifestyle for his family).
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Originally Posted by Nenshi
When passengers complained they get busy signals when they call dispatchers, the brokers indicated that drivers refused to drive at peak periods. Drivers, for their part, claim that the brokers have simply not invested in their dispatch systems and don’t have enough people to answer the phones. Drivers tell stories of waiting an hour or more to be dispatched while passengers are desperately trying to get through.
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I tried to get a cab in the suburbs last Saturday night. After waiting on a busy signal for half an hour I finally got through and requested a taxi. I did this twice - neither cab showed up, and I spent the night on a (fcking uncomfortable) 4 foot long couch. So why don't the taxi companies hire more people to work in their call centers (it's obviously easy to estimate high demand periods), or better yet develop an iPhone app to request a cab? Easy - there's no incentive. The protected monopoly we have now leads to poor service and a lack of innovation.
Nenshi doesn't even mention the cost of fares in his article. I recently spent some time in Hong Kong and Singapore, and I was shocked at how cheap the fares were there. Keep in mind that these cities have a cost of living that is similar to Calgary (CPI within 5%), and higher gas prices (50-100% higher). Singapore also has some of the highest levels of vehicle ownership taxes in the world. However taxi fares are 30-60% lower than they are here. This leads me to beleive that significant price gouging is occurring at the present (regulated) fare.
Reducing barriers to entry is the key to what needs to happen. Allowing entrepreneurial drivers to easily set up their own businesses will drive market innovation, service and lower prices.
So why aren't we seeing any change? The current cab companies (Checker, Associated etc.) are very entrenched in the market, and will fight to protect their position. I wouldn't be surprised to see them on the donor lists of every member of city council. They're smart guys, and they're obviously making lots of money. Also there's the problem of what to do with the existing licenses. The City has created these objects with artificial values in excess of $100,000 - lift the cap on licenses and these would be worthless. The City would have to compensate existing owners of these somehow, which would have the potential to turn into a political gongshow. So we are stuck with the current, crappy, inefficient, and expensive system.
Sorry for the rant, it was inspired by my weekend taxi experience.
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Well technically the city could do whatever they want - I'd prefer that they don't compensate owners. I just doubt that would go over well with some of the bleeding hearts on council. And I'm sure the media would pick up the stories of some poor — spending his life savings on a taxi medallion, only to have it become worthless - bad PR for politicians.
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