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September 14, 2009
Media Release: Municipalities are Failing to Adequately Disclose Taxi Regulation to the Public
A survey of fourteen Canadian cities shows that voters have little chance of understanding how taxis are regulated, the quasi-monopolies created by civic regulation, or the economic effects of that regulation, this according to a new study from the Frontier Centre for Public Policy on taxi policy across Canada.
The study, Who Owns Taxi Licenses—Exclusive Taxi Licences and Transparency, surveyed 14 Canadian municipalities and found that few Canadian cities give enough information for voters to understand their regulatory activities on taxis, let alone those activities’ wider implications on drivers, consumers, and how city policies lead to quasi-monopolistic practices.
“All major Canadian municipalities regulate taxis in a way that is becoming an economic rarity across the world,” notes David Seymour, the study’s author. “While governments often regulate the quality and safety of products supplied to market, taxi regulation is a rare case of governments attempting to fix the price and quantity of a product.”
Seymour points out that while people might reasonably disagree over the merits of this regulatory approach, most people agree that governments should act with the informed consent of voters. “However, cities provide scant information on how existing taxi regulation benefits a select few—but not drivers or consumers.”
The study notes why civic taxi regulation and inadequate disclosure has largely gone unnoticed to date:
• Limited taxi plate numbers concentrate the benefits of limited competition on a small number of operators but spread the cost of limited supply over a large number of customers (and potential competitors);
• The average plate holder is naturally more motivated to influence taxi regulation than the average voter.
“This imbalance of political calculus makes it even more important that municipalities make it easy for voters to understand their regulatory activities,” argues Seymour.
According to the report, the solution is for municipalities to start making their regulatory activities clearer. Cities should:
• Regularly report on the number of plates;
• The prices paid when plate holders transfer their plates to others;
• The rental income gained by plate holders who rent their plates;
• The identities of multiple plate holders.
The Frontier Centre report notes all of this information pertains to a publicly-endowed privilege granted by city governments and thus should be automatically available for voters and journalists to assess on city websites.
“When you look at the expectations for governments to govern with consent and the economic implications of taxi regulation, better disclosure should be a natural expectation,” says the study’s author David Seymour.
For more information and to arrange an interview with the study's author, media (only) should contact:
The Frontier Centre for Public Policy
is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."