Friday, 12 February 2010

Regulation-seeking behaviour

Anti-Dismal puzzles over why the New Zealand Taxi Federation might want regulations mandating shields between cabbies and passengers and video cameras. He can't see any reason why the regulation would be necessary: cabbies have a strong interest in their own safety and are best placed to judge whether such devices are necessary given their clients, the times they run, and so on.

Ah, grasshopper. You see but you do not see.

Recall first that we do not have taxi cab medallions in New Zealand. Entry is relatively easy. There are a few big dispatching companies, but there can be independent operators as well. The independents can jump in and out of the market depending on demand conditions: somebody who normally doesn't drive a cab but has a taxi licence (available on taking a course, passing the test, and passing police and medical checks) can throw a sign on his car and make a few extra bucks if there's a big rugby match on.

Recall second that organized professional groups have sometimes been known to lobby for regulations that impose costs on themselves so long as the relative costs imposed on their competitors are higher.

Grasshopper...will you yet snatch the pebble from my hand?

For more on the excellent history of taxi cab deregulation in New Zealand, see the CIS Policy Journal from Winter 1999.


  1. A taxi owner/driver MUST belong to a registered taxi organisation which takes away your "rugby match" theory.

    The rest I agree with.

  2. The regs, as best I can find, are here. You need a driver licence showing area knowledge, then an operator licence if you want to be independent. So it's indeed more likely that temporary supply would come in from folks signing up with one of the fringe taxi companies than satisfying the operator licencing conditions on his own. These smaller operators would be expected to be more willing to take on some temporary cabs during demand spikes.