Government Deregulation On The Taxi Industry

927 words - 4 pages

INTRODUCTION
Recently in Auckland there has been outrage at the high prices of taxi fares. The last significant change to the taxi industry was caused by government deregulation, in 1989. This economic inquiry report is going to investigate the impact of this government policy, and the unintended consequences for both consumers and taxi drivers.
SUPPLY AND DEMAND
Deregulation decreased the barriers to entry for people wanting to become taxi drivers. This is due to a removal of a restriction on the number of taxis operating in specific areas, thus anyone can become licensed. Only basic requirements, such as passenger safety, and testing metering, equipment exist (Gaunt, 1996). The effect of ...view middle of the document...

The intention was that the free market would control these fares; particularly as the taxi market is a monopsony, if not perfect competition, for the most part.
Although this method of controlling fares has not been overly effective as once a passenger is in a taxi, and commenced their journey they are at the mercy of the driver, they are a captive audience. This means they must pay the fare that the taxi driver states, as they have very few alternatives. They also cannot leave their taxi journey halfway, as they are likely to be stranded somewhere, which is particularly true when there are no substitutes (e.g. public transport) present, such as late at night.


IMPACT ON TAXI DRIVER’S

The deregulation has also had an impact on taxi drivers. This is because of the huge increases in the quantity of taxis available. The result of this is that “there are so many drivers that there's not enough work” (Fa'avii as cited in Cumming, 2014, para. 28). This indicates the removal of the quota that restricted the number of drivers in an area has resulted in an oversupply of taxis. The effect of this is that if drivers are only being paid per journey, they are likely to be making fewer journeys due to the oversupply, and hence they will be receiving a reduced income. The effect of this is that the families of these drivers will be finding it harder to live, due to the low incomes they are likely to be earning over long hours. Although the fares are high, if drivers are only receive a few of these in a shift, once they remove their operating costs they will be receiving very little profit (Tait, 2014b). This could be an additional contributing factor to why taxi fares are so high.
CONCLUSION
Overall it seems that the deregulation of the...

Find Another Essay On Government Deregulation on The Taxi Industry

Air Transport Market Deregulation and its Effect on the Short-Sea Shipping of the Greek Domestic Market

4958 words - 20 pages mentioned that the deregulation of the greek short-seashipping market has recently (from November 2002) been implemented, a fact whichwill increase the competition between the two different means of transport. Thisarticle attempts to discover the results and effects of this deregulation in the Greektransport sector from the scope of both air transport and short-sea shipping. Theconclusions are based on the evaluation of data as they were recorded in the

Government Intervention On The Internet Essay

1683 words - 7 pages longer a tool limited by the powers that govern. Generalities suchas these have sparked great debates within our nation's government. This paper willattempt to focus on two high profile ethical aspects concerning the Internet and itsusage. These subjects are Internet privacy and Internet censorship.At the moment, the Internet is epitome of our first amendment, free speech. Itis a place where a person can speak their mind without being reprimanded for

Canada and Their Government´s Intervention in the Entertainment Industry

1243 words - 5 pages Many people argue whether not Canada has any culture at all, and why American culture seems to have such a big influence on Canadian music, art and television. Over the years the Canadian government has tried to protect and develop talent in Canada. Once British traditions started to fade away, the influence on Canada from America became stronger. If Canada was to become a strong independent country they needed their own identity. The government

history on the provisional government - harris - russia

788 words - 4 pages ‘The fall of the provisional government in October 1917 was entirely due to its own failings’ Explain why you agree or disagree with this view (25 marks) The provisional government failed due to its own failings, those created by other groups and those left by the Tsar after his abdication after the February revolution in 1917. The Tsar had left issues such as economic problems and dependence on the war. Groups such as the Bolsheviks also caused

The Impact of Philosophy on Government

1445 words - 6 pages that surrounded him and watched how they acted under several circumstances while Hobbes gave a more scientific approach to the behavior of the human beings. Hobbes left very clear in his work that for a government to be powerful it had to have a strong central authority. His ideas had a great impact on the Federalists during the first steps of the creation of the US laws. Hobbes concept that men were weak and needed to be guided made

Impacts on the Russian System of Government

2403 words - 10 pages Impacts on the Russian System of Government The Russian Tsarist system under the Rumanovs was extremely resistant to change in all forms. Reforms were brought in only to preserve and little improvement resulted from these reforms. In this essay I will attempt to examine whether or not war had any impact upon the Tsarist system of government, and whether or not war brought about any changes to the system. First

The Ramifications of Government Reform on Education

1774 words - 7 pages publicize high school performance teachers tend to deviate from standard teaching of subjects that are inclusive of math, sciences, literature, social sciences and the arts, to teaching what the government want students to be tested on. This strategy that still exists today referred to by teachers as “teaching to the test” is a poor strategy that hinders student learning for many reasons. Firstly, if a student is solely taught something only to be

Industry Project Report on the Australian Private Health Fund Industry

3248 words - 13 pages .Restrictive in Pricing and Costs3.High Barriers to Entry4.Elastic DemandConclusionMiles Kemp, in an article titled "A Greedy System" in the Adelaide Advertiser, 14 January 2003, said:The spiralling cost of insurance premiums is a measure, critics say, of the recent Federal Government policies designed to revive the industry... What the government didn't bank on was that insurers couldn't translate the additional members into profits. The insurers are

Economic Impacts on the Airline Industry

1858 words - 7 pages Economic Impacts on the Airline IndustryOver the years we have been able to see how airline travel has changed. From the deregulation in 1978, to the terrorist attack of 2001, government regulations have created much of the changes (2007). How has these changes affected the supply and demand in the airline industry? Has this created positive or negative externalities? How has this changed the wages for the workers? Have monetary and fiscal

The Airline Industry Impacts on Economy

1773 words - 7 pages The airline industry has had many affects from the economy. This paper will explain how the economy has affected the airline industry by explaining the shifts and price elasticity of the supply and demand; as well as provide information about the positive and negative externalities. The monetary and fiscal policies have had several different impacts on this industry and this paper will explain that along with the wage inequalities occurring

Biotechnology Effects on the Canola Industry

1724 words - 7 pages biotechnology in the industry. People within the canola industry and the consumers of canola products have numerous opinions on the economic, ethical and environment sides of this issue. Developers/distributors such Monsanto and many Australian farmers believe that the benefits of canola such as its economic and nutritional value, environmental benefit and the extensive testing that took place on the genetically modified canola prior to it being

Similar Essays

The Taxi Industry In New South Wales

746 words - 3 pages threat of competing companies taking customers from them as a result of having lower prices. These are however somewhat regulated by the Government as they do influence prices in regards to taxi fares, to which each taxi service must obey. Due to the Taxi Service industry resembling an oligopoly, with monopolistic qualities, there are many implications on the welfare of this market structure. In the Taxi industry, it is necessary for new entrants

Regulation Deregulation Of The Transportation Industry

613 words - 3 pages contradictory opinions on the role of the transport systems in society as a whole. The major argument throughout the industry tends to fringe on mistrust, thus, the transport system will not enhance the conveyance of the transport service. Therefore, the government regulations serve in the public interest. When the information becomes available across the platform, we see efficiency in the industry. Fertile information encourages coordination across all

Deregulation Of The Airline Industry A Complete Study Of The Changing Trends Of The Airline Industry And The Deregulation Affects

2301 words - 9 pages would gain air service and some would lose it. Prices would go up in some markets and down in others. Those predictions proved correct, but by any measure, deregulation has been a success. Lower fares. Measured in a variety of ways, airfares have consistently fallen under deregulation. Some economists have found that fares are 22 percent lower today than they would have been if the industry had stayed under government control. The free market has

Australian Dairy Industry Analysis. Includes The Effect Of Deregulation Of The Industry

2327 words - 9 pages , 1974, 244).In the past few years, deregulation has been highly debated as to whether it has had positive effects or negative influences on the dairy market. The areas listed above will be analysed alongside specific sectors of this analysis which will establish facts and draw conclusions as to whether a deregulated, highly competitive dairy industry is more appropriate than a controlled, secure industry.2 Structure2.1 Size of IndustryThe dairy