After serving time in solitary, er, Northern Virginia (which, okay, is actually pretty nice) I'm finally moving into the District this weekend. Naturally, I've been following the cab-fare changes and the ensuing controversy (D.C. cab drivers are currently striking during business hours one day a week) with much interest. Over at my old haunt, OpenMarket, Eli Lehrer, Michelle Minton, and John Berlau have been debating how free-market advocates ought to think about city taxi commissions. Lehrer says that "taxi cabs as we know them exist by virtue of government regulation," but at least in theory, I have to side with Minton on this one when she writes:
Taxicab companies are funded by private capital and owned and operated by private businessmen. It is their livelihood at stake if their business fails.
The common argument for commissions that set fare prices for all the cabs in a city is that you can't really have a competitive market; someone hailing a cab on a street doesn't have the same options and price information as someone picking between orange juice brands in the grocery store. But as Berlau points out, cab brandingsuch as in the case of New York's yellow cabshelps solve many of the problems of customer captivity.
All this is purely theoretical, of course, and the only place in the U.S. we're likely to see cities without taxi commissions anytime soon is in fan-fic sequels to Snow Crash. From a purely pragmatic perspective, then, I have to say that I'm personally pretty thrilled with Fenty's recent rate cuts, as I suspect that, in the areas I frequent, I'll rarely have a terribly tough time finding a ride.
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