Land of the Free and Home of the Government-Protected Cartels

You are buying groceries when a woman asks you if you know how she can get a ride home. Does she need to call a taxi? You say, “No, I’ll give you a ride home.”

When you drop her off, she says, “Can I pay you something for your trouble?” You say she doesn’t need to, but she insists.

The next thing you know, you are surrounded by police who impound your car and give you $2,000 worth of tickets for running an illegal taxi service.

In most U.S. states, it is illegal to accept money for giving someone a ride unless you are a licensed taxi driver, a public transit agency, or a private bus company — and in the latter case you can only go to selected destinations such as the airport. Taxi drivers, transit agencies, and transit unions support this protection of their cartels.

Is it really worthwhile for the police to set up stings such as the one that caught this man in Miami? Miami isn’t the most dangerous city in America, but I suspect police have a lot of more important things they can do. I am sure Emily Proctor could entrap a lot of guys into giving her illegal taxi rides, but it wouldn’t make a very entertaining plot line in CSI Miami.


18 thoughts on “Land of the Free and Home of the Government-Protected Cartels

  1. D4P

    I’ve always thought it was strange that:

    1. You can legally have sex with someone (assuming you’re both of age, both consenting, not related, etc.)
    2. You can legally give someone money
    3. You can’t legally have sex with someone AND give them money

  2. Neal Meyer

    (Turn on sarcasm switch)

    But Antiplanner, don’t you see? The public needs to be protected from these vandals! What would have happened if that poor undercover officer had been whisked away and had her throat slashed?

    (Turn off sarcasm switch)

    Sadly, such laws do not protect the public from bad service given by transit agencies.

    Jitneys were popular in the early days of the automobile, where their nickname came from the slang term for a U.S. nickel. Jitney drivers would charge 5 cents for giving passengers a ride, the same price as that being charged by streetcar companies. In Houston, jitney drivers would hang out near the busiest traffic areas, where at one point they were getting some 22 percent of all paying passenger traffic. Or, they were until the City Council banned them entirely in 1924, at the urging of the streetcar and railway company. This was part of a wave of such municipal bans that were enacted across the country in the 1920’s.

    A traction engineer named John Beeler, who wrote a report for the City of Houston in 1920, noted that jitneys transported people at a rate of 14 mph, verses the 9 mph achieved by the streetcars. He noted a preference for speed amongst the public which contributed to the popularity of jitneys.

    Jitneys are also a popular form of transit in other countries. 10 years ago, I paid $5 to take a 2 hour 100 mile jitney trip from Negril Jamaica to Kingston, where I jumped into a large Volkswagen van along with some 15 other passengers. I’ve also taken jeepney trips in the Phillipines. This is the public transportation that is provided in countries that don’t have money to burn on transit agencies.

  3. prk166

    I wonder why MADD doesn’t worry about taxi deregulation to help get more cabs on the streets to help with making it more likely drunks will take a cab instead of driving.

  4. aynrandgirl

    It’s drunk-driving awareness program a smashing success, MADD doesn’t really bother doing that anymore. Like most NGOs whose original purpose has been served, rather than dying a dignified death it has been coopted by the activists in its ranks. It’s only real purpose now is to provide jobs for activists, because they’re unemployable in a real job. MADD has morphed into a general-purpose neo-prohibitionist group, who pushes for things like jail time for parents who serve their children alcohol. MADD’s original founder has publicly criticized them.

  5. the highwayman

    Copyright laws are like this as well some what. The same can be said for patents too.

    Just consider for a moment that if I were selling bootleg copies of “The Best Laid Plans” ten feet in front of the entrance to Walmart, that would be ilegal.

  6. Ettinger

    I’m not an expert on taxis, however it may be interesting if someone could post the other part of this equation which is:

    What does it take to get a taxi license in a US city ?

    I’m asking also because in many European countries, the number of Taxi licenses is controlled, that is capped, by the government. As a consequence, in some European cities a taxi license can cost €200,000 (that is roughly $300,000). Sort of a “Cap and Trade” system for taxi licenses.

  7. C. P. Zilliacus

    In the early 1990’s Sweden substantially de-regulated its taxicab industry nationwide. While taxicabs still must have a license
    (e.g. a “medallion”), the cab must be roadworthy and insured; and drivers must have a hackers’ license for driving a cab (something like the CDL required of North American truck and bus drivers), there are no government barriers to entry, nor does the government bother to regulate taxicab fares.

    Isn’t that an example that the U.S. states and counties and municipalities should follow?

    I see no public interest served by government agencies telling providers of taxicab services what fares they may charge for their services – nor does government do any good by erecting artificial barriers to entry for would-be taxicab drivers.

  8. MJ

    There is no public interest rationale for taxi regulation. Note that no consumers are clamoring for this type of regulation. It is an example of the demand for regulation arising from incumbent firms. Existing drivers that own medallions see regulation as the best way of limiting competition. Governments are more than happy to oblige, since limiting the supply of medallions allows them to tap a new revenue stream.

    In his book The Burden of Government, Edwin Mills estimated that, as of the early 1980s, entry and fare regulations on taxicabs in New York were imposing welfare losses on the order of $80 million per year on consumers. $60 million of this was in the form of higher prices, which were essentially a transfer to producers (drivers), the remaining $20 million was pure deadweight loss.

    In the current Miami case, there are at least two things wrong. First, there is the issue of needless regulation of taxi services. This problem is then compounded by allocating additional resources to enforce said regulation, for example by harassing some 78-year old guy who was just trying to be helpful.

  9. C. P. Zilliacus

    MJ, note well that I do not have a problem with non-economic government regulation of taxicabs, including periodic safety equipment inspections, licensing of hackers (to prevent persons convicted of certain criminal acts, including DWI and rape; and persons in the country illegally from getting behind the wheel). Taxicabs are a public service, after all.

    Cabs are also required to have meters, and the meter is tested for accuracy as part of regulation (but operator of the cab is not told what to charge).

    “In line with the Swedish National Road Administration’s regulations, the taxi driver must have all price information clearly visible both inside and outside of the vehicle.”

    Some Swedish owners of the scarce medallions (pre-deregulation) did object to this change, but I have observed that those “old-line” Swedish cab companies are still in business there, and seem to be doing well.

  10. Francis King

    In these cases, based on one party’s view in a newspaper, it is hard to draw any conclusions.

    Either … the police did a sting, and got their man, despite his protestations after the event,

    Or… the police don’t understand the law. Taking pin money for giving them a lift is perfectly legal.

    I suspect that the police have an audio tape recording. Truth will out.

  11. Lorianne

    The taxi lobby successfully killed light rail in Honolulu in the 1990’s. They’re at it again.

    For many years you could not get a public bus to the airport for the same reason, but that changed once the public complaints grew too strong.

  12. the highwayman

    Lorianne brought a good point about vested interests not wanting a more open market.

    Ironically this is the same kind of hypocritical crap that Mr.O’Toole gets paid to do.

    Various special interests in the auto/highway/sprawl/big oil lobbies pay enties such as Cato, Reason, Heritage & etc. Which then pay people like O’Toole, Cox, Rubin, Samule, Zucker, etc to produce anti-market papers to protect their benefactors interests.

    Just as this blog that you are reading is part of his job, O’Toole isn’t running this blog out of his own pocket, so much as your pocket.

  13. Dan

    Lorianne brought a good point about vested interests not wanting a more open market.

    Right. There are many reasons why regular folks can’t maximize their calculations of Pareto optima. One of them is the manipulation by Madison Avenue. Another is vested interests and their K St manipulations. Another is time constraints. Another is that rational utility maximizing agents don’t make up the majority of the population, nor are they good at utility maximization, nor do they always calculate for themselves only [this is a rant on our species’ decision-making capabilities, nothing else].


  14. Kevyn Miller

    prk166, New Zealand did the same as Sweden and deregulated it’s taxi industry in the early 1990s. The proportion of fatal crashes in which alcohol is cited as a contributing factor fell from an average 35% in the five years before the deregulation process began, to an average 25% in the five years after deregulation was completed. The effect was most pronounced in rural areas where taxis had been restricted to picking up fares only in designated towns. They couldn’t take a return fare from any other towns.

    New Zealand had actually been stupid enough to impose a 10pm closing time on all bars. While that regulation was in force 45% of road deaths were alcohol related. That regulation was phased out in the latter half of the 1980’s leading to the 35% figure at the start of taxi deregulation.

  15. prk166

    Thanks for the interesting news on Sweden and New Zealand. I was just wondering things randomly based on my own experiences. Minneapolis isn’t much of a taxi town. Denver’s a bitch to get a taxi. They’re not into the whole being flagged down thing even when you’re in the city-city and even when they’re indicating they’re available. It makes me either want to drive or take the bus it’s such a pain. I’ve done the drive there, get a taxi later thing a few times. I had a short period of time with access to a breathalyzer. I know I don’t like to drive even when I’m at a .04. I don’t feel comfortable with it even though I’m well within legal limits. It makes it tempting to just drive back home instead of biking and getting the car the next day. I figure if I’m tempted, especially after a handful of pints, there are probably others out there just doing it. Seems like the easier to flag a cab, the easier it would be to get around a temptation like that.

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