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Commentary: Deregulate taxis: Pick up Metro slack, help employment

This article first appeared in the St. Louis Beacon, April 5, 2009 - Our Metro public transit system is out of money and cutting service, now people can’t get to their jobs and so will have to quit. Simultaneously, we have unemployed people who own cars who might be willing to drive people to work for a small fee. Do you see the solution?

Let’s deregulate the taxi business and let anybody drive anybody anywhere for whatever price the parties can agree on.

The taxi business is highly regulated. The “St. Louis Metropolitan Taxicab Commission” limits the number of cabs on the street and sets the fees the drivers can charge.

The rationale for this regulation is presumably as stated in the Taxicab Commission’s mission statement, which I plucked off its website:

“The mission of the St. Louis Metropolitan Taxicab Commission is to ensure safe, reliable, high-quality transportation to the citizens and visitors of the St. Louis area. The Commission is dedicated to providing fair and equitable authority over the provision of licensing, regulation, and enforcement of vehicle for hire services that will contribute to the growth and image of the St. Louis Region.”

Well, I say the purpose of regulation of the taxi cab business is to limit entry of people into the business and so ensure that those who are in the business can make more money.

Dear readers, we have Group of People A who can’t get to work because of lack of cheap transit and Group of People B who would drive members of Group A for less than the regulated price. Market clearing voluntary transactions do not occur because the Taxicab Commission limits entry and enforces high prices. That is insane.

The first argument against my proposal to deregulate will be, of course, safety (and “the children”). Those in favor of the current cartel will assert that only those who are properly trained and certified can do this complicated job of driving for hire. My response: Driving isn’t that complicated. Most Americans over 16 do it.

Will some drunk people attempt to drive cabs in an unregulated environment? Yes.

Does that happen in the current environment? Yes again.

Does the paperwork and testing mean much? I doubt it.

Would a driver getting into an unregulated cab figure out that he ought to get out if the driver appears drunk? Sure. This is America. Take care of yourself.

What about liability for accidents? Fair question. I envision entry of new drivers into the system and fairly prompt self organization into branded groups. One imagines that insured drivers would create some sort of self identification process to prove holding a commercial driver’s license and having insurance coverage. Potential customers could then make their own decisions about whether to get into any particular car.

Drivers without a proper license and insurance will drive passengers for less and some people will exercise their God given rights as Americans to bear that risk. Americans should not be treated like children. Trust the people, and they will figure it out for themselves.

Another aspect of this is “regulars.” As any bartender will tell you, the booze business survives on regulars. A good bartender knows what the regulars want and gets their drinks ready while they walk from the door to their stools. If we deregulate the cab industry. it will be about the same. Drivers and customers will develop “regular” relationships. Eventually regular drivers will pick the same regular customers every day.

A lingering question relates to price. The regulated price, with a limited number of cabs, assures a decent living for the drivers. There is nothing wrong with people making a decent living. But what of the rights of those willing to do the job for less? Should regulators deny those people willing to do it for less the right to pursue a career as a cab driver in order to protect current drivers? The issue comes down to this: Are we running this system for the drivers or for the consumers? The correct answer is to run the system for the consumers. The American system is by and for the people not by and for the insiders.

Let us not forget those cushy bureaucrat jobs running the regulatory scheme. It is always sad when someone is laid off. But I note that many, many of our citizens have been laid off their private sector jobs.

Are the government workers to be immune so that those of us who continue to have jobs in the private sector must shoulder an ever larger tax burden to pay all those government workers? That makes no sense. We need to cut the government work force dramatically and cutting taxi bureaucrats is as good a place to start as any.

Recent newspaper pictures of forlorn people who lack a way to get to work should not make us feel sad. Those pictures should make us feel mad (a) at the taxi industry which, in the false name of safety, has convinced our local government to establish taxicab regulations to limit entry and raise price, and so harm the consumers, and (b) the elected officials who bought their baloney and established the system, and (c) the people who participate in the regulation.

Bevis Schock is an attorney in private practice in Clayton.

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