Yesterday, in Athens, taxi workers went on strike to protest the country’s recent deregulation of their industry. To comply with IMF recommendations, Greece has increased the number of permits available for taxi drivers.
This policy is not an austerity measure per se, but rather a liberalization of the taxi industry, not requiring a change in government spending or taxation. As taxi drivers protest, other Greeks should be celebrating this measure — it will mean more cabs are available at lower prices.
Here in Washington, DC, taxi drivers are also up in arms. Two drivers associations are suing Mayor Vincent Gray and the DC Taxi Commission because of the 2008 switch from fares based on zones to meters. Some drivers say their pay has dropped by 30 percent as a result. They are correct that the meter rate is determined arbitrarily, but most likely the current rate is higher than the market rate would be. As in Athens, the number of cabs allowed to operate in DC is artificially capped. Jim Epstein writes at Hit & Run:
Since 2010, the D.C. Taxi Commission hasn’t been issuing licenses to new cabbies. There’s no official waiting list, but a representative from the commission told me she receives calls “all day, every day” from potential applicants. In other words, want-to-be cab drivers are clamoring to get into the industry at the going rate.
In both cities politicians have earned favor with cab drivers by restricting their number to keep rates high. But liberalizing taxi policies will benefit all city residents — especially potential new cab drivers — except those who have historically been sheltered from competition.