Taxicab regulation and urban residents' use and perception of taxi services: a survey in eight cities

1. Several market failures would justify some forms of price control and entry regulation in the taxicab industry. Unfortunately, history shows that very often the taxi regulators get captured by taxi operators' lobbies and fail to adapt their regulation to changing market conditions. Hence, faced with a sclerotic service supply, several cities and countries have thoroughly deregulated their taxi industry... only to gradually bring back some elements of regulation later on. Since the late 1960s academics have at length debated the pros and cons of price and entry regulations for the taxi market, either using very simplified models of selected segments of the market or referring to empirical data comparing service supply before and after deregulation in one or in several case studies. Because of the paucity of available data on the demand side, most of these empirical studies generally only consider the supply side, overlooking the impact of regulation or deregulation on taxi use and on the perception of taxi services by their clients. We have selected eight capital cities with contrasting regulatory systems and carried out a survey among their residents to understand why and how they use taxis and to collect their opinion about the quality of the service provided. Some 3200 respondents answered about 40 questions. Taxi use varies greatly from one city to the other, both in terms of trip frequency and of trip purposes. A statistical analysis of the results enabled us to draw some conclusions about the impacts of various elements of taxicab regulation on the mobility of urban residents.