Tuesday, May 27, 2008

Duo-opoly

The story of the Unicity/Duffy quasi-monopoly's latest attempt to stifle the taxi market--this time by fighting to have the Taxicab Board reject Spring Taxi's proposed expansion--reads like something out of an Ayn Rand novel, where no one is allowed to go out of business, but no one is allowed to prosper.

If the taxi industry is so terribly unprofitable, where cab drivers make no money sitting on their brains for 16 hours waiting for a call, why should it be protected?

And if Spring Taxi thinks there is money to be made in the cab business, and that the essence of Say's Law--where supply creates demand--may be right, they should be allowed to find out. If there isn't any money to be made, they will scale back their operations or go out of business. The last five centuries of Western Civilization's progress says that it's worth a shot, and that Spring has the right to take it.

Predictably, the fear of competition was justified in the name of "the public good," as Joan Wilson from Unicity Taxi told the Winnipeg Sun:

"It would be devastating to the industry. It simply wouldn't be in the public interest," Wilson said, noting Christmas is among the only strong revenue periods every year."

Imagine if other sectors of the service industry were governed by such anti-market principles. Corner stores are a marginal business: their proprietors work long hours for slim profits. Should a quasi-judicial board defend their interests and forbid new stores from popping up on neighborhood street corners?

So far, the only public support for constraining the cab industry comes from the provincial belief that "Winnipeggers don't take cabs anyway." While there may be some truth to that, you have to wonder why. Could that fact that hardly any new cabs have been put on the road since the Andrews Sisters were on the top of the pop charts have anything to do with it?

I haven't ridden in a Winnipeg cab for more than a couple of years, either. It may have something to do with the last time my wife and I rode in one (on a Sunday night in the "off-peak" Autumn season it was) we had to stand on Corydon Avenue for more than half an hour after we called for one, waiting for it to arrive.

Again, Monsieur Say may have been right, a greater supply would create a greater demand--even for the protectionist drivers at Unicty and Duffy's. The Taxicab Board should allow Spring Taxi to see if they can make it happen.

7 Comments:

Blogger Daniel Hildebrand said...

The last time I took a taxi...home from Union station (admittedly around Xmas), we called on the special direct line to Unicity, and then waited an hour and a half.

A day earlier, we had walked out of a friend's appartment in Kensington Market, stood on the street for thirty seconds, hailed a cab, and were at the train station in minutes...

9:36 PM  
Blogger Daniel Hildebrand said...

One other thing... If the taxi business is so unprofitable as Duffy and Unicity claim, then why are licenses going for $200,000?

Actually my first year economics professor once told me: Cabbies all make have huge amounts of undeclared income.

9:42 PM  
Anonymous Anonymous said...

Not anymore. Reporting rules are so strict there are random meter readings now. Plus with the computers officials can find out if a fare was in the car etc.

12:30 AM  
Anonymous Anonymous said...

"The Taxicab board should allow Spring Taxi to se if they can make it happen."

The Taxicab Board ought not to exist.

2:07 PM  
Anonymous JBG said...

After being in Montreal on business for a week and being able to hail cabs at will, in Winnipeg I stood on Broadway for a half hour attempting to hail a cab... After walking for a while I caught a bus.

There is definitely room in Winnipeg's urban transportation market for competition.

3:29 PM  
Blogger Louis Riel said...

I hail several cabs a week. A few more on the road is a good thing. Since I choose to live life without an automobile, a couple cab rides usually have to happen. (Its cheaper than owning a car, anyways)

And yeah, they're EVERYWHERE in Montreal.

Unicity and Duffy's can go stick a fork in their idiot protectionist arses.

5:07 PM  
Anonymous Anonymous said...

Some thought might be given, not to the companies, but to the protectionist attitude in terms of the artificial license values created by the system and protected by the status quo

9:11 PM  

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