The Tyranny of Taxis

I have written before (multiple times, in fact) on the ridiculous nature of Ottawa’s taxi market. It’s a cartel system. Existing providers have a protected market in which possible competitors are blocked from entry. Taxi plates, purchased from the city for purported purpose of driving a taxi, are bought, sold and rented on a grey market. Prices for plates on this market are incredibly expensive, allowing plate holders to get rich off of, essentially, a public entitlement. It’s rent-seeking at its most egregious…and the city has not shown sufficient nerve to deal with it.

Today, it wasn’t the customers or would-be competitors who were decrying this pseudo-monopoly; the plate holders are now upset:

The president of the local taxi union says gas prices and insurance fees are “out of control” and Ottawa cabbies are looking to increase their fares by seven per cent.

Ontario Taxi Union Local 1688 president Amrik Singh says that Ottawa cab drivers pay about $8,000 per year for insurance – and ‘one little fender bender’ will cost them an additional $300 per month. And he can’t bear to watch gas prices go up any more than they already have.

“You don’t even want to look at the gas station when you pass by,” Singh told Metro Tuesday.

It is easy to see how rising costs but price caps will put the squeeze on drivers. One driver noted that with gas, insurance and “company fees”, his costs are approximately $12,000 per year. That is quite a burden, and I certainly have a lot of sympathy for an individual trying to make a living during trying times.

But I don’t have a lot of sympathy for the industry as a whole. Drivers may be getting squeezed by companies and gas prices. There is a measure of unfairness in the government freezing prices for a (non-essential) service, but the industry regularly fights to ensure they retain their industry’s protection from the government. It’s not really the place of industry participants to claim to be the wronged party in this scenario.

If you lobby the government to meddle in your business, it’s partially your fault when the government meddles in your business.

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