Regulation of Taxi Services

Note: Of course, I agree with Davidabout taxi licensing. However, I may be the only person on this blog who was once a mini-cab driver. It was a very long time ago, and in South London. One day, feeling short of cash, I walked into a cabbing office and offered myself as a driver. The owner of the company came out and looked at my car. He helped me fit a two way radio and sold me a magnetic aerial. He told me to give him £25 every week that I wanted to be a driver, and that my name from now on would be H21.

Oh, and he told me to go and get myself hire and reward insurance.

And that was it. For the next year, I was a mini-cab driver, getting my second education. I didn’t need any piece of paper from the State. Despite this, I didn’t rape anyone. I didn’t kill anyone – though I did carry a weapon under my seat. Cabbing was a quick way to earn money for the working classes or the generally hard up. One of my colleagues was a milkman. Another was a bus driver. Another ran a burger stall in the summer months. Someone else was getting married, and needed extra money for a house deposit.

Thanks to compulsory licensing – introduced for London by that piece of stinking offal George Young, who is big in this “Tory” Government – we have the following:

  • Ordinary people can’t afford to get into the cabbing market
  • In many parts of the country, the licence-awarding body has been captured by ethnic mafias, and natives are positively excluded
  • Where natives are allowed into the market, they are, as in Oxford, spied on by the totalitarian scum who run local authorities, and terrorised into not speaking their minds on matters of race and immigration, or on the privileged status of homosexuals
  • Taxi fares are much, much higher than they were in my day – much higher, that is, in real terms


by David D’Amato

Recently, National Public Radio’s All Things Considered offered an important if unusual lesson in microeconomics.

Noting the economy’s “bumpy ride” over the past few years, the segment spotlights one “sure thing” in these tough times: Taxi medallions. Due to the high price, most drivers must take out loans to own them, giving the lender a security interest — or “mortgage” — in the glorified pieces of tin. “A taxi medallion,” the story explains, “is a physical object that gives the bearer the right to pick up rides for hire; it turns out, it’s also a good investment vehicle.”

That’s because the price of medallions has skyrocketed in recent years, with at least a couple fetching more than $1 million each. The medallion owner featured in the story, a New York cabbie who bought his for about $215,000, watched it more than triple in value in eight years.

The high price of medallions is, of course, a corollary of their scarcity, of the fact that they have the practical function as the only inroads into owning a legally operating cab. Once barriers to market entry are erected around cab driving, or any other worthwhile economic activity, those who control access to that activity can collect tolls at the entryways.

This is the way artificial — as against naturally-occurring — scarcity works, coercively precluding competition in order to allow rent-seekers and established market actors an unfair, unearned windfall. The mortgages attached to worthless pieces of metal are directly analogous to the economic rents presently embedded in virtually all other areas of economic life.

The only way that big business can extort wealth from the productive is to forcibly rule out natural opportunities to create value. The state, through a profusion of permits, licenses and regulations, creates the legal framework without which monopoly could not exist and thus serves the interests of big business.

Discussing medallions on All Things Considered, Baruch College business professor Edward Rogoff said, “There’s nothing like having a monopoly to keep you profitable.” He goes on, “When you limit competition, you get strong profits, and those profits get reflected in the value of the enterprise.”

Rogoff’s example of Econ 101 is simple and obvious enough, but it has far-reaching implications for contemporary economic reality, a reality made up of state-fortified cartels in a very unfree market.

Market anarchists submit that people should be left free to use their resources in any peaceful way they see fit. Arbitrary restrictions and spurious, state-created “rights” that benefit the “Top Companies” must be slowly, nonviolently abraded, replaced with genuine, labor-based individual rights and a bona fide free market.

The state’s costly permission slips don’t “protect consumers,” but instead subject working people to the centuries-old leeching of a ruling class. We could and would do just fine without that idle class and without their mechanism of authority, the state.

4 responses to “Regulation of Taxi Services

  1. My father was a cab driver (or, as he preferred, “Taxi Proprietor”), and the restrictions you mentioned have been law for a long time. Take a look at the Local Government (Miscellaneous Provisions Act 1976, Part 2. I’m surprised it didn’t affect you (when was your stint as a cabbie? Late seventies, early eighties?).

    I seem to remember that there was some kind of “consultation” locally (in Hove) shortly after the act was passed. A meeting of local “Hackney” drivers enthusiastically welcomed the introduction of the new powers given to the council. As my dad put it, “the cabbies’ hatred of private hire” meant that they were prepared to accept ever more onerous licensing conditions, simply because private hire would now be more closely regulated. It did not seem to occur to the majority, that they too would be subject to existing rules, and any new ones dreamt up by the council.

  2. Regulation didn’t come to London till the present century.

  3. I think that Black Cabs have had a degree of regulation/cartel system for some time.

    It is the minicabs that are now being regulated as well. Obviously, without the government to regulate all human interations people will immediately resort to rape, assault and murder. It would never do to allow people to agree amongst themselves to give each other lifts without prior government vetting and licencing.

  4. Many years ago, I drove a mini-cab for a few weeks. I found it unrewarding.