Taxis need some competition
In what appears to be an attempt at continuing protectionism, the Vancouver Taxi Association is suing Suburban Taxi Companies for what they feel to be unlawful taxi operations within Vancouver.
The reason for the lawsuit, according to Carolyn Bauer, general manager of Yellow Cab, who spoke on behalf of the Vancouver Taxi Association, is that:
“There’s lack of enforcement in Vancouver. There’s so many Suburban Taxis operating down in Vancouver. They’ve all painted themselves yellow. They’re all unaccountable for anything; I get all the calls specifically at Yellow Cab and we’re tired of it. We’re just tired of it... It’s all about safety, it’s all about accountability. We follow the rules and regulations the province and the city of Vancouver set out. And so should the other taxi companies that operate in the Suburban company.”
It seems hard to believe that a taxi operating in Burnaby, Delta, or even Langley would be less safe than those operating primarily in Vancouver, especially considering that auto insurance in British Columbia is provided through one Crown corporation—ICBC.
Rather the true problem for the Vancouver Taxi Association seems to be that there is too much competition operating in Vancouver. As economist Randy T. Simmons describes:
“Producers demanding regulation want competition made more livable, that is, they want entry to their market strictly controlled so that the market is stabilized for the fortunate few in the industry.”
The lack of competition allows taxis to charge higher prices. And taxis under a cartel system have fewer incentives to offer better services. Indeed, it seems like taxi competition in Vancouver and across Canada is exactly what is needed.
The table below, from a Globe & Mail article on high taxi rates, compares fares for similar taxi rides across Canada and to a couple of major American cities.
5 Km Ride
All figures in Canadian dollars. Based on daytime fare, with two passengers in taxi and little to no waiting in traffic.
In Vancouver, residents not only pay higher prices compared to most other Canadian cites, but they also pay considerably higher prices when compared to the U.S. It’s not even clear that these high fares are paid in exchange for good service. A Google search of two of the city’s most prominent taxi services shows that one has a rating of 1.7 out of 5 stars (based on 90 reviews) and another has a rating of 1.9 out of 5 stars (based on 59 reviews).
Perhaps Canadian cites should begin allowing increased competition and choice, which could provide a nice counter to Canada’s taxi cartels. Dynamic options that are more accountable to market demands—such as Uber and Lyft—provide consumers with greater choice, allowing them to choose which type of vehicle they want to ride in, while also being able to see who will pick them up and how other customers rate particular drivers.
Drivers can also rate passengers and see how potential passengers have been rated by previous drivers, providing a new level of comfort and safety for drivers. The ability of customers to choose who picks them up creates additional incentives for drivers to offer cleaner vehicles and better experiences for the passengers, as well as creating a mechanism for increased accountability.
In addition to these advantages, these services are often cheaper than taking a traditional taxi.
Unfortunately, however, many Canadian governments (as well as U.S. local governments) seem to be siding with the existing taxi companies and are pushing back against the likes of Uber. One hopes that these attitudes will change and that consumers will be able to soon realize the real benefits of choice and competition.
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