Home > Business, Politics, What's Wrong With U.S. > DC Taxi Medallion Bill: Bad For Riders, Bad For Drivers

DC Taxi Medallion Bill: Bad For Riders, Bad For Drivers

Here is an editorial by Brian Tierney of the Washington Post.

Taxi medallions/licenses are actually quite common throughout the United States, but their ubiquity is not an indication that they are a sound economic policy.

Licensing is one of the oldest tricks in the book when it comes to creating artificial barriers to entry, protecting the entrenched interests in the industry and stifling competition and innovation in one fell swoop. Commonly, the issue of “public safety” is raised as a reason for licensing: I need to be licensed as an accountant so I don’t fuck up your taxes, and my sister needs to be licensed as a cosmetologist so she doesn’t burn you with hot water or stab you with scissors (I have to admit, I understand licensing for doctors and public accountants, but cosmetology licensing and its connection to public safety seems especially dubious). This benefits the license holders because it creates artificial scarcity for their products and services, and can be beneficial to governments in the short term because they can raise revenues by selling licenses. In the case of DC, they are selling 4,000 licences for $10,000 a piece, which will raise $40M for the city… less than 0.5% of DC’s total budget of $9.6B. Obviously, this is more about enriching taxi companies than it is about plugging budget shortfalls.

The thing that breaks my heart about the entire situation is the public’s apathy. Sadly, it is just not the case that a room full of shouting, lower-class, mainly black, male, immigrant taxi drivers is going to convince doctors, accountants, lawyers, teachers, union construction workers, or any number of others who enjoy the protectionist benefits of licensing that the cause of the DC drivers is worth it. That is really too bad, because licensing hurts everybody except for those in a position to benefit from the first round of artificially created scarcity (politically connected insiders/white collar criminals). I’d like to imagine that if the drivers had organized and protested the bill by calling it the “DC taxi job killing bill”, they would be able to get a better response from the public.

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