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The Silence at the Stands: Agony in the Portuguese Market for Taxis

Author

Listed:
  • Daniel Murta

    (Faculty of Economics, University of Coimbra and GEMF, Portugal.)

Abstract

Taxis cannot come cheap. You are driven by a professional with all the flexibility of cars minus several inconveniences. And yet … why aren’t they? Drivers will grumble about prohibitive gas prices not covering lousy fares. The root, and truth, of the matter lies in service: clients, miles… and the dearth of them.The market fits a description of a free-entry cartel, run by associations, tolerated by a captured regulator, where neither entry nor exit budge price. For consumers, it is a raw deal. Meanwhile, monopoly profits are squandered among the maximum of deadbeats, who barely get by. Better if regulation evolved from the capture by the drivers’ organizations, towards price and licenses set according to traffic levels, after a clearing negative price shock. Does it matter? Taxis can be precious in bridging the gap between the shunned efficient public transports and environmentally unsound and pricey motoring.

Suggested Citation

  • Daniel Murta, 2014. "The Silence at the Stands: Agony in the Portuguese Market for Taxis," Notas Económicas, Faculty of Economics, University of Coimbra, issue 39, pages 36-47, June.
  • Handle: RePEc:gmf:journl:y:2014:i:39:p:36-47
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    File URL: http://notas-economicas.fe.uc.pt/texts/ne039n0228.pdf
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    References listed on IDEAS

    as
    1. Matteo Aquilina, 2011. "Quantity De-restriction in the Taxi Market Results from English Case Studies," Journal of Transport Economics and Policy, University of Bath, vol. 45(2), pages 179-195, May.
    2. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
    3. Beesley, Michael E & Glaister, Stephen G, 1983. "Information for Regulating: The Case of Taxis," Economic Journal, Royal Economic Society, vol. 93(371), pages 594-615, September.
    4. Cairns, Robert D. & Liston-Heyes, Catherine, 1996. "Competition and regulation in the taxi industry," Journal of Public Economics, Elsevier, vol. 59(1), pages 1-15, January.
    5. Arnott, Richard, 1996. "Taxi Travel Should Be Subsidized," Journal of Urban Economics, Elsevier, vol. 40(3), pages 316-333, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L59 - Industrial Organization - - Regulation and Industrial Policy - - - Other
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General

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