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Needless Government Regulation

On Monday night, the Annapolis City Council voted to increase taxi cab rates, which got me to thinkin’……..

Crossposted on Annapolis Politics

As you now know, we have higher taxi rates here in Annapolis. Alarmingly, in her letter supporting the rate increase, transportation director Danielle Matland had this to add:

As the City is supporting the taxi industry in its request for a rate enhancement, this would be a good time to implement additional requirements for the industry. This year, in cooperation with the AACVB, we are conducting voluntary Customer Service training for the taxi industry. Customer service training or similar training should be a requirement for all taxi drivers. It would be onerous and costly to for (sic) to provide a constant series of classes for incoming drivers. A practical method of implementing this beneficial training to enhance the industry would be to add a continuing education requirement as a condition of permit renewal. This Department would coordinate appropriate presentations or the taxi driver would have the option of selecting and documenting attendance in a course of their own choosing.

This is a perfect illustration of government mis-regulation of private industry, and the attitude of the regulators that stems from such abuse of market power.

Since the city of Annapolis regulates the rates cabs can charge, they are in entire control of the cab industry–they can make or break cab companies in a more efficient way than they can make or break the rest of us. The cab companies practically had to beg for a rate increase just so they could stay in business! And how does Ms. Matland respond…..she basically says “We’ve got them by the balls! Now is a great time to add more restrictions and requirements to the permit process.”

Un-freeking-believable!

The government has no right to mandate “customer service training” for private cab companies! They shouldn’t even be wasting taxpayer money to offer voluntary classes! Every other private company is responsible for training their own employees–if they think a certain training will be profitable, they will do it. But since the city controls how much profit cab companies can make, they must assume the burden of the training! What if the city did this for every industry. Balderdash!!

Now, don’t get me wrong–taxi cab regulation is useful (although perhaps not necessary). They have a unique ability to usurp people who are very vulnerable and susceptible to such abuse, as users of cabs often don’t know how much a certain trip ‘should’ cost, and information that would compare a particular cab to its competitors is hard to come by.

Notice, the problem is informational–it it prohibitively hard for people to ascertain the rates being charged by their cabbie in relation to those of another. However, you do not have to regulate prices to fix this problem.

Allow me to offer an alternative solution. The city can require that every cab paint on its doors, in 36 inch letters, the drop charge, per mile rate, and per hour rate. This would allow the free-market principles that guarantee efficiency to be upheld. Taxi cabs could charge whatever they want, and people could make a decision based on price and any other factors as to which cab they want to take. Before long, a going rate for cabs would be established, as cabs charging a higher rate would not get any passengers.

Moreover, this would save this taxpayers money. Currently, city staff must monitor the price of gas and send out notices when gas prices reach certain benchmarks, as fuel surcharges kick in after that point. They also spend time administering the aforementioned driver sensitivity programs, or whatever. Here’s an idea: let the private market take care of its own business, and cut some unnecessary jobs in the process!

The attitude of the Annapolis government is unacceptable. Instead of exerting more and more control over private industry, how about letting them decide what is right for themselves? It would work out better for all of us.






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