The real cost of the soon-to-be-mandatory taxicab cameras won't be the 30-odd cents it adds to the cost of the typical cab ride. Rather, it's the loss of surplus that will come when the World Cup hits in 2011 and jitney cabs will fail to come into the market because of the increased fixed cost of shifting your private car into taxi service. Right now, best I'm aware, so long as you have a driver's license that permits it, nothing much stops you from slapping a sign onto your car saying "Cab" and charging to run folks around town. We'd expect that to happen during odd spikes in demand.
We're going to have such a spike when the World Cup hits. It's unlikely many new permanent cabs will come on-stream with the demand shock, and the temporary folks will be knocked out of the market with the camera regulations. With lower supply elasticity, current cabs will earn rents either through fare increases, much higher turnover and shorter downtime, or increased ability to be choosy about customers. Absent the regulation, I'd expect jitneys at airports if airport regulations allowed it and near the venue after the event.
I'd previously noted the raising rivals' costs argument here; TVHE here grasps for an alternate efficiency explanation but can't really find one. Neither can I. At least not a plausible one.
As the incidence of the regulation will largely fall on foreign visitors and rugby fans, I'm not too worked up about it. So long as I don't need a cab for any reason during a demand spike. The cameras are fairly cheap and won't do much to the baseline stock of taxicabs: that'll still move with longer term demand. We'll just see reduced supply elasticity during odd peaks. Fortunately my cabbing needs tend to be a- or countercyclical with respect to these events.
