Capping Taxi Numbers A Flawed Approach

Capping the number of taxis in the Wellington region is a ridiculous idea – one that will result in higher prices, longer waiting times and which will prove disastrous for consumers, ACT MPs Sir Roger Douglas and Hilary Calvert said today. 

"Capping the number of taxis will effectively give existing taxi operators a monopoly; fares would inevitably rise and passengers would be faced with longer wait times – particularly during peak demand,” ACT Transport Spokesman Hilary Calvert said. 

“If we want the public to queue up for taxis before and after work – or, worse, late at night – restricting taxi numbers is the easiest way to do it.

“International experience with taxi regulation has painted the same picture over and over again - when the number of taxis is capped the wait times for passengers is higher and vice versa.  When Ireland lifted its cap on the number of taxis during the 1990s the proportion of people waiting for more than five minutes fell from 75 percent to 52 percent.

“A shortage of taxis could also be dangerous for young people, especially young women, trying to get home safely at night.  Prior to deregulation in Ireland waiting times after midnight were greater than 30 minutes in 43 percent of the hours surveyed.  After deregulation this fell to only 6.2 percent.

ACT Finance Spokesman Sir Roger Douglas said that placing a cap on the number of taxis would harm drivers already on low wages, not help them as Wellington Mayor Celia Wade-Brown suggested.

"If taxi drivers really are getting paid low wages and could get a job elsewhere that paid more, they would vote with their feet and leave.  The fact that they remain in the industry shows that the wages they earn are higher than those they could get elsewhere," Sir Roger said.

"Rather than helping those in the industry, capping taxi numbers would instead force many drivers out of work and onto the dole.

"And it is not surprising that the taxi industry has come out in support of further regulation to restrict taxi numbers; any business would welcome the Government stepping in and blocking their competitors from the market.

“Regulating the safety and competence of taxi operators should absolutely continue as normal but arbitrarily capping the number of taxis will be nothing more than a slap in the face for both passengers and drivers," Sir Roger said.

"We urge Mayor Wade-Brown to think about the unintended consequences of her actions and reconsider her proposal," ACT MPs Sir Roger Douglas and Hilary Calvert said.