In 1978, taxi licence holders in Ireland successfully petitioned the government to restrict entry into their trade by limiting the number of licences. They argued that because there were significantly more taxis than the demand justified, incomes were being depressed. Over the next 22 years, licences became increasingly scarce, driving up the average price of a licence to 90,000 Irish pounds in 2000.
However, that same year, the taxi business was deregulated and a new report in Economic Affairs suggests consumers are all the better for it. Its findings include:
The report also found that there was no drop in standards or in the quality of service.
Despite the successes of deregulation, concentrated producer interests licence holders and labour unions have made some inroads in reversing or reducing its impact. For example, old licence holders will be compensated for the losses they incurred as a result of the fall in the price of licences. Moreover, a new taxi regulator and Taxi Advisory Council have been established to oversee industry standards, licence fees and stakeholder interests.
Source: Sean D. Barrett, Regulatory Capture, Property Rights and Taxi Deregulation: A Case Study, Economic Affairs, December 2003, Institute of Economic Affairs.
For more on enterprise-limiting regulations http://www.ncpa.org/iss/sta/
FMF Policy Bulletin\3 February 2004
