Should The Common Council Decide Taxi Rates?

The Buffalo Common Council has a Taxicab Committee and the City Code has 12 pages devoted to the regulation of taxicabs. A recent Buffalo News article mentioned that taxicab companies are seeking approval of a 43% increase in taxicab rates from the Buffalo Common Council.

The City Council actually controls how many taxicab licenses can be issued by limiting the number of taxicabs to 300. According to the code years ago after months of discussions, public hearings and investigation it was concluded that the operation of taxicabs "must be regulated to protect the interests of the public".

Limiting the number of taxicab licenses limits competition. At a time of rising prices wouldn’t competition be a good way to serve the public? If you are an entreprenuer interested in starting a cab company, after you make your way through the 12 pages of regulations which limits how much you can charge and how old of a vehicle you can drive, you will be denied the opportunity to start your new company. You may have a great new business model but the City Council has determined that new entrepreneurs are not allowed. Many cities besides Buffalo regulate taxicabs in the same fashion.

The whole approach just does not make sense to me. We do not limit other businesses to a set number that I am aware of. Nor do we limit what a business owner wants to charge a customer. Some cities such as Indianapolis have deregulated the operation of Taxicabs. Indianapolis saw 32 new companies emerge within the first  six months after deregulation, 75% of which were owned by minorities and women. Wait time was cut in half and rates were lowered when Indianapolis stopped limiting the number of taxi licenses.

Minneapolis removed the limit to their taxi licenses last March and won a court fight that was filed by taxicab companies seeking to keep the limit in place. A number of new entrepreneurs have surfaced since Minneapolis opened up their taxicab market.

Dealing with regulating taxicabs is just another one of many distracting issues that prevents Councilmembers from focusing on the things they need to focus on. Small business entrepreneurs are the back bone of our economy, we need to encourage new businesses by removing regulatory barriers.

In my opinion getting the City out of the taxicab business would be a step in the right direction. What do you think?