Deregulate City Taxi Industry, Report Suggests

Frontier Centre, Media Appearances, Regulation, Transportation, Uncategorized

Deregulation of Calgary’s taxi system would create new jobs in a time of economic downturn and help stranded people hail a cab much faster, says a study by a Saskatchewan think-tank.

Study author David Seymour of the Frontier Centre for Public Policy argues cabs are still too difficult to get in Calgary.

The regulated market has made it impossible for new drivers to enter the system, he adds, creating a bartering system between licence holders and those who want to rent licences so they can work.

“The artificial scarcity of licences has created a hidden market where privileged licence holders trade licences or rent them to drivers who want to work but do not have one of their own.”

As a result, cabs become scarce and rates remain expensive, particularly to the edge of the city or the airport, which doesn’t provide riders with a flat rate and can cost patrons up to $80 for a ride to the fringes of Calgary.

Seymour’s paper, released Thursday, says the number of taxi licences in Calgary has stayed virtually the same since 1986, at 1,311, with only the addition of 100 new handicapped-accessible vehicles in September 2006.

“While obviously welcome, that these should be the only increase shows how far behind city growth the licensing regime has fallen,” the report reads.

But opponents of deregulation argue that cabs are only difficult to get in Calgary during unusual times.

“In a deregulated system, everybody would starve. There would be too many cabs on the road and not enough business for them,” said Associated Cabs’ Roger Richard, who sits on the city’s new taxi limousine advisory committee.

The only time it’s difficult to get a cab is when it’s really cold, or during the Christmas party season, Richard said.

But you can’t fill a system as if there’s going to be bad weather everyday, he said.

The average cab-to-person ratio across North America, Richard said, is 1-to-1,000. In Calgary, he estimated that it is 1-to-750.

Ald. Ray Jones, who sat on the taxi appeal board between 1993 and 2006, said cabs can sometimes be difficult to get at bar closing time, not because they are scarce, but because drivers are tired of picking up drunks who are often unruly and vomit in the vehicles.

“Cabbies have told me themselves they don’t want to pick up drunks. . . . I feel sorry for these guys. Imagine if someone threw up in your car every night and you had to clean it up.”

Seymour’s study looked at three cities, Calgary, Saskatoon and Winnipeg, and compared them to New Zealand and Ireland, which recently embraced deregulation and saw the addition of hundreds of cabs and significantly reduced rates.

“Why is it that all other industries, like restaurants, for instance, can set their own rates through fair competition, put it in their window and the customer can choose? Why can’t that work for cabs?”

But Jones said if rates were not set by council, cabbies would be making much less than they are now.

“Cabbies have a pretty good life right now. They can support a family, but if we let the system set its own rates, the rates would come down too far, making driving a cab an extremely difficult living, and reducing safety and quality regulations.”

Richard said times are particularly tough when gas prices spike.

Ald. Druh Farrell said Calgary’s system is far from perfect and more needs to be done to ensure cabs are available and safe.

“If you can’t get a cab, it’s a public safety issue,” said Farrell, whether you’re trying to get home late at night, get in out of cold weather or get home from a date gone wrong.

Farrell questioned whether the effort to add more drivers into the system has been sincere.