The twisted taxi business

Super-fast post about Martin Cash's article in the Free Press on the taxi business in Winnipeg:

Since the beginning of the year, the going price for a taxi "medallion" has increased by 61 per cent, with a couple of recent transactions closing at a whopping $412,000.

Barry Prentice head of the of the U of M's Asper School of Business faculty:

"Where is the social policy of all this?" he said in an interview. "Why do we create a regulated cartel to charge high prices and control and reduce supply. Whose interest is that in? Does it serve the 410 taxi owners or the 650,000 people living in Winnipeg?"

My comments in the Freep:

Barry Prentice is bang-on. The extremely high prices for cab licenses is proof that the model is broken, and that there are too few cabs on the road. There is absolutely no reason for this industry to be regulated at all, except for basic requirements related to safety.

However, the longer you wait to deregulate the more difficult it will be, because so many cab owners have large sums of money invested in licenses. The government would likely have to compensate those owners at the cost of millions of dollars to the taxpayer if it were to deregulate. The gov't and the PUB need to get this under control now.

I've commented before about this, though I don't have time to dig up the links. This system is more than screwed up, and needs to get fixed before it gets any worse. The cost of a license in a deregulated system would be nominal, so some of the recent cabbies would lose hundreds of thousands of dollars if we were to deregulate. But we have to as a matter of free market principle and because the system is so disfunctional.

Let's see if former cabby Marty Gold puts a positive spin on this on his talk show.