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Politics : Politics of Energy -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (22791)	8/19/2010 12:02:56 PM
From: TimF	Respond to of 86356

Since tourists are at best occasional visitors and more often one time visitors, the cab companies reputation doesn't matter. Reputation isn't just the reputation with those individual consumers. A reputation for ripping people off spreads generally. Also many visitors are not just one time visitors, and even for one time visitors reputation matters more than in the past. If certain taxi companies where in the habit of ripping off tourist it would be all over travel web sites, travel agents would know about it, friends who had gone to the city before might not about it, etc. Reputation would be less applicable in direct terms for smaller companies, but if rip offs became a serious issue (not just a tourist rate but one that was a severe rip off, much higher than the ordinary rate), then business would be driven to companies that actually have a reputation (usually larger companies), so the difficultly in small companies establishing a reputation wouldn't matter as much for consumers (it would hurt smaller operators, but so does the current system, esp. if your including potential small operators, that don't exist because of the limit.) But fine, as much as I hate price controls and thing they are nearly universally stupid (they can be better than uncontrolled prices in a situation where supply is limited by government fiat because such limits could result in crazily high prices, which should be blamed on the supply limitations, but too often get blamed on "the lack of regulation" or such nonsense), they could be kept. They aren't my main issue here, the limitation on overall supply is. Why have a law limiting the number of taxis? You can inspect taxis, require cabbies to pass tests on driving, and knowledge of the city, regulate prices, etc. all without limiting the number of cabs. Its not that there was some problem with not having limits, and the limits where passed to solve the problem, its that the entrenched special interest (the medallion owners not the cab drivers) engaged in successful rent seeking.