Occupational Licensing

Big Yellow Cartel


Montreal mulls a sensible shift in its taxi regulations:

Compete? In an open marketplace? You talkin' to me?

Montreal's cab drivers are grumbling that Bixis and the 747 airport bus are taking away business, but a policy paper published…by the Montreal Economic Institute suggests deregulating the taxi industry would help the market adjust to changing supply and demand for cab rides.

"Consumers on this side are actually big losers," said Vincent Geloso, a master's student at the London School of Economics, who co-wrote the paper with Germain Belzile, a researcher at the MEI.

There currently aren't enough taxis in the city to meet the demand, he said, so people are waiting longer for cabs these days.

"It's also harmful for new entrants into the market because of the limited supply of permits. To just begin to work as a cab driver, you have to pay close to $200,000," he said.

The provincial transport commission limits the number of taxi permits available in Quebec. There are currently 4,442 permits in use in Montreal. They are resold by existing owners, although they actually have no real value. The high price tag for a permit reflects the value would-be cab drivers are willing to pay to get into the market.

By removing the restriction on the number of taxis operating, drivers could get into—and out of—the market more easily, the policy paper says.

You can read the paper itself here. While its basic arguments aren't new, I was happy to learn from it that several American cities have liberalized their taxi rules, as have the authorities in Ireland, Sweden, and New Zealand.

Gratuitous video bonus:

NEXT: In Olden Times, Government Could Still Do Wrong Right

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  1. By removing the restriction on the number of taxis operating, drivers could get into — and out of — the market more easily, the policy paper says.

    Nothing gets past those policy paper writers these days.

    1. Correct. They studied up on barriers to entry just before writing the paper!

      1. Not sure how it got into the newspaper that way. I think we are seeing a miracle in our time.

      2. Jesse’s title is racist.

  2. In Seattle circa 1988, it was less expensive to get limo ride to the airport than taking a taxi. This was due to Seattle regulations standardizing taxi rates and the insurance rates on limos was cheaper. I think this is because other drivers give limos a wide berth and taxis get hit more often.

    1. Get hit or hit?

      1. Whether it be the fault of taxi drivers or others, a taxi has a bigger need for collision coverage despite a limo’s larger size.

  3. Arrrgh! This be common sense. How many taxpayer dubloons were scuttl’d on these pointless studies?

    1. I read the PDF but didn’t think to check on how the study was funded. Pretty sure the publication was by a private organiz’n, though.

      If it was a gov’t-funded study, though, so much the better in terms of its ability to influence policy.

      1. If it was publicly funded, I suppose there could have been worse ways to spend the money. Unfortunately, I dont think it will make a difference because there are all of those taxi drivers who paid an ass load of money for their right to drive a taxi, I doubt they will be interested in dividing up their take home pay with people who dont have to climb over the same barriers they did.

        Bottom line, some politician is looking for a hand job and some taxi driver organization will gladly deliver said HJ as long as nothing happens with this report.

  4. I remember reading an article years ago about a uk town which was considering raising the number of licenses for taxis.
    The author took a sense of pride in the fact that the local written media was supportive of a taxi drivers’ protest against increasing the number of permits.
    The guy was, you see, a principled idiot. At least I could understand that current license holders would be upset: they’d be losing money. But the reporters were supporting a dumb idea not beacuse they had anything to gain, but out of sheer, pure imbecility.
    What about the consumers? What about other people wanting to get jobs as taxi drivers and not being able to? Do you really need a degree from the London School of Economics to consider their interests?

    1. The mere fact that those licenses cost 200,000 loonies on the market shows that the government messed up long ago.

      Cleaning up this mess without offending the current license holders too much is possible, though: the government can just SELL additional licenses, and gradually lower the price for those additional licenses

  5. They obviously just need better regulations and the right people in charge to “bend the curve” on rising taxi costs. Yes, that will fix everything.

    1. Btavo, Mr. Bulger. Summing up the effect of government on a market could not have been conveyed more elegantly.

      1. Bravo too!

  6. A cartel be bad fer a community nay matter who seemingly benefits.

    1. Are you an English pirate or a French pirate? “Nay” sounds English, unless you are a French speaking Somali pirate affecting an English accent?

  7. “Consumers on this side are actually big losers”

    They are Canadian.


    1. Canadians are hosers.

    2. If they’re dependent on airport cabs, they’re probably not Montreal residents.

  8. If these land lubbers are wishin’ to see the worst case of regulatory restrictions and restraint of trade on local transportation, let ’em take a gondola ride down Venice’s Grand Canal.

    Aye, they’ll wish they’d been robbed by pirates instead and be cryin’ salty squid tears when they get the bill.


  9. No new taxis.

  10. If ye be ownin’ one o’them taxi permits now, ye be sayin’ “yarrrr, don’t be changin’ the rules on me now, ye scurvy dogs.”

    1. Government encourages entities to become entrenched interests.

  11. Oh wow, OK dude I like that. Makes a lot of sense.


  12. Arrgh! Flotsam like this really shivers me timbers! An honest buccaneer neither needs nor asks for a government permit to plunder.

    1. On the contrary, my dear fellow – there’s nothing like taking out letters of marque and/or reprisal to put a nice legal gloss on your high seas villainy. Play your cards just right, and you can end up Lieutenant-Governor of Jamaica, and drink yourself to death in a hammock on the beach, surrounded by piles of coin and attended by beautiful women. (Better than getting strung up at the yardarm of a British frigate, not so?)

  13. Barriers-to-entry save jobs and are good for the environment. Think of all the bus-driver jobs saved and all that dirty taxi pollution avoided. People should just stay home anyway.

  14. Is a progressive era when you give up more hits every inning?

    1. fuck, it’s hard to pitch anything by a high and tight Pirate. see, i tried. that’s runs, not hits.

  15. yar! dose kabbiez will make up fer it with a plank.

    (sill drunk, apparently, cuz that was hilariously funny

  16. “It’s also harmful for new entrants into the market because of the limited supply of permits. To just begin to work as a cab driver, you have to pay close to $200,000,” he said.

    Yes, but without strong regulations to prevent harmful competition, how will hard-working small businessmen with limited means be able to succeed?

    Oh, wait…

    1. What thoreau fails to appreciate is that it’s the wee businesses who are the problem.

  17. Legalize taxis and drugs simultaneously. Then taxi drivers (like William Shatner) could still afford to do drugs on the reduced fares they would receive. A win-win!

    1. This will be the policy that will finally create a market for my Nerf Taxi.

    2. Driving a taxi on intoxicants is fine, if it it your taxi (or the taxi owner allows it).

    3. Do them? Shit. There are many cab drivers that sell drugs, or will take you a place where you can buy them. Some cabbies make their living picking up kids in the suburbs, taking them to the city, and then home. Cash up front, of course.

  18. Ahoy! AHOY THAR!
    Arrrgh! It be harder to board a Frigate than a taxi. The hack license does naught but put coin into the gypsies’ purse.

  19. Brian D. Smedley, PhD, is director of the Health Policy Institute at the Joint Center for Political and Economic Studies writes

    But the new law is an important first step toward ensuring that more Americans can access care when needed and that the system will treat them equitably, regardless of race, ethnicity or income. Congress will need to take steps to improve it. But it is a major development toward making quality, affordable care available to all.

    IOW, it is one more step towards socialized medicine. Nice to see someone on left admit it.

    1. But I read in the paper every day about one ethnicity or another being denied health care, you know, because they’re ethnic! Or something.

  20. darn canadians! they’re slow at learning.

  21. Arrrr! I have not an idea o’ how we simple picaroons might compete wit the biggest hornswagglers of them all, the government!

  22. Why is everybody talking pirate on the 15th anniversary of the New York Times publishing Industrial Society and Its Future?

    Why is reason ignoring this important anniversary?

    1. Arrr! Don’t ye mean

      “why be sea dogs an’ land lubbers talkin’ sea dog on th’ 15th anniversary o’ th’ New York Times publishin’ Industrial Society an’ Its Future?

      Why be reason ignorin’ this important anniversary, ya horn swogglin’ scurvy cur!”

      Quit speakin’ like a landlubber, lassy!

    2. Pirates will be pirates. And Suki, I think the subject is pirate taxis or the like, roughly speaking–or was that redundant?

      1. Okay, I will do the “whoosh” over my head myself 🙂 Thank you DEG.

        1. Avast, don’t you scurvy landlubbers be knowin’ what day ’tis?

        2. Okay, so it’s not only pirate taxi day but pirate humans day too. Lucky we be, by gum.
          Ruthless the Pirate.

  23. Arrrr! I be havin’ nay an idee o` how we simple picaroons might compete wit th’ biggest hornswagglers o’ them all, th’ government!

    1. Avast, ye server bilge-rats, t’ Davy Jones wi’ ye!

  24. Off-Topic: The hate part of my love/hate relationship with BoingBoing and its commenters.
    “Millionaires and billionaires, many of whom did little more than win the genetic lottery”
    “Koch brothers and other corporatists’ agendas”
    “why don’t you go to the libertarian paradise of Somalia”
    “It’s a new aristocracy, after all.”

    There are a few bright spots in the comments, but there is also no shortage of sputtering rage.

  25. Avast ye scurvy dogs! Sing this sea shanty wit’ me!


  26. That scurvy scallawag Tim Lee claims that the high cost o’ owning a taxi medallion in New York reflects the price rationing of the limited amount o’ space on the city streets.

    But thar be ways of rationing a limited public good with unlimited demand that don’t unduly burden small business buccaneers. Yar!

  27. Every normal man must be tempted at times to spit upon his hands, hoist the meter flag, and begin counterfeiting medallions.

  28. That scurvy scallawag Tim Lee claims that the high cost o’ owning a taxi medallion in New York reflects the price rationing of the limited amount o’ space on the city streets.

    That be explainin’ why New York strictly rations the number of private vehicles allowed on the city streets.

    Wait, um … Belay that.

  29. Yar! The only proper way fer taxis to operate is as ARRRmed privateers! Here’s me license, ya scurvy dags! Come and take me taxi at yer own risk!

  30. They are resold by existing owners, although they actually have no real value.

    Hey look! Economic ignorance!

    I’m pretty sure that what he really means is, “people resell these things even though the government didn’t initially charge anything to issue one.”

    Nonetheless, if there is a market for the licenses, then it definitely has “value”, as it should if there is a limited supply and having one enables the holder to generate income from it.

  31. Ye be correct, says I! The value of any bit o’ plunder be the price ye can get for it, cost of manufacture all notwi’standin’. If I makes me a boat-hook and ye will give me a thousand doubloons for it, it be worth a thousand doubloons, no matter that it be a worm-ridden scurvy bit o’ bilge.

  32. That scurvy scallawag Tim Lee claims that the high cost o’ owning a taxi medallion in New York reflects the price rationing of the limited amount o’ space on the city streets.

    Mr. Lee is hopelessly confused about what “property rights” are. He is right in the limited sense that medallions are property, but what he is missing is that the requirement to have a medallion in order to operate a taxi is an infringement on property rights – namely, the right of the owner of a car to charge passengers who he drives places.

    In the analogy he presents, an FCC license infringes on the rights of the owner of a spectrum-using-device.

  33. “Consumers on this side are actually big losers,” said Vincent Geloso, a master’s student at the London School of Economics

    The only surprise here is that anybody at the LSE gives a shit about consumers.

  34. My contribution to Talk Like A Pirate Day: GIVE ME YOUR GOLD OR I WILL KILL YOU.

    1. Arr, another Obama operative at Reason revealed. Si.

  35. That scurvy scallawag Tim Lee claims that the high cost o’ owning a taxi medallion in New York reflects the price rationing of the limited amount o’ space on the city streets.

    1. And, whoops, in a lovely reminder of times past, I totally screwed up submitting that comment and failed to hit preview. Meant to say that Captain Ridgely is correct, and while I’m all in favor of using the price mechanism and market action to allocate scarce space on city streets, that should apply to all vehicles equally.

  36. it’s nessary to have some regular about tax

    1. Begone, scurvy spambot!

  37. Regarding the gratuitous video bonus: Now, THAT’S the Shat I’m talking about, man!

    Where do you find this stuff? I had no idea it even existed! This is gold-pressed latinum, baby!

    (Seriously, though, given Sunday School concepts of Heaven and Hell, is this video more likely to earn Shatner a chance to meet Chapin in the afterlife, and if so, what will they say to each other at that moment?)

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