March 11, 1985
The 16-page report is available for free download from: The Heartland Institue of Chicago as an 828kb PDF document.
Reproduced here is the report's final section.
In the first section of this report we described the importance of taxis in providing inexpensive, speedy, and flexible service to persons in a broad range of social and economic conditions. In the second section we briefly suggested other areas--specifically jitney services and parcel delivery--where taxis could provide additional valuable services to urban communities. In the third section the nature of current taxicab industry regulations was described. The history of taxicab regulations in Milwaukee was used to illustrate the protectionist nature of such regulations and the intrinsic difficulty in using the political system to alter or improve taxi service.
In Section V we refuted three common justifications for restricting the supply of taxis: reduction of congestion, improvement of travel safety, and avoidance of violent competition. Finally, in Section VI we discussed five options open to public officials involved in taxicab regulation. We concluded that the fifth option -- complete, phased-in deregulation of entry and removal of fare floors and ceilings -- was economically the superior option.
Although we believe the city officials' goals should ultimately be to refrain from future market intervention and to allow the supply and price of taxi service to be determined by decisions made by owners, drivers, and the riding public, a gradual policy of disengagement would minimize the disruptive effects of such a return to the free market. One approach would be to accept all independent owner applications within a fixed time interval, say one month, then divide this total by twelve and issue a number of new permits equal to the resulting quotient every month for one year. This method could be adapted, by changing the number of months, to allow for longer phase-in period; in cities where current medallion prices reveal a larger investment by current permit holders.
We feel it is important to remove all restrictions on taxi operations that currently prevent the drivers from carrying parcels or performing jitney services. Fare structures should either be changed to allow an increase in overall taxi demand, or be freed from all government regulation and allowed to reflect the voluntary agreements reached by drivers and passengers.
Present standards of driver licensing and vehicle inspection should be retained, though we suspect that the requirements of private insurance companies could accomplish much the same results with less cost to the government. Violent acts or threats of the same should be dealt with under existing criminal codes. If acts of violence occur during the decontrol process, we suggest that conviction for such actions be considered sufficient cause for permanent permit or license revocation.
It has been over 50 years since taxis operated in a free market environment in many large cities in the United States. We hope that this study, by revealing the costs and consequences of past policies and the opportunities for reform, has shown that a return to freedom in this Industry is indeed possible. The benefits to owners, drivers, and customers should be apparent to everyone.
Go to the Taxi-Library Regulation Page at http://www.taxi-library.org