D.C. Wants to Impose Taxi Quota

December 22nd, 2011

I loathe price controls in general, but taxi quotas in particular (see here, here, and here). Now it looks like D.C., which has a relatively free-market approach to taxi-licensing wants to impose a medallion system.

From Reason:

The nation’s capital currently enjoys an unusually free and open cab industry dominated by independent drivers who set their own hours and pocket most of their own revenues. That’s not to say anyone can break in. The supply of cabs is limited by a licensing exam for drivers that’s been closed since 2010. (D.C.’s taxi commission receives calls “all day, everyday” from people who want to sign up for the exam, according to one employee of the commission.)

But the supply of taxis isn’t limited, and that’s a key distinction. It means the cabs themselves are worth about as much as any other car with a meter. That’s what’s made it possible for D.C. cabbies to be free entrepreneurs since they don’t have to make a major capital investment before they can start driving. All they have to do is buy or rent a car.

That would change if section 5, article K of a new bill co-sponsored by Councilmembers Mary Cheh and Tommy Wells becomes law. That provision would empower the Taxi Commission to “establish a public vehicle-for-hire licensing quota which provide that the number of new taxicab vehicle licenses may be limited.”

This would create a medallion system, plain and simple. Limiting the number of taxi permits means they’ll become expensive and scarce. It’s the very same arrangement that’s caused endemic cab shortages (see New York City), handed control of an entire industry to one company (see Milwaukee), and forced cabbies to arbitrarily give the lionshare of their revenues to big companies (see Boston).

As I am loathe to say, ugh.

See this JoshVlogs I did of a cabbie who spent years of his life, lots of money, and had to take several exams in order to obtain a taxi license in Washington, D.C.