Taxi Regulation Impedes Competition In Denver

I have commented on increased regulation resulting in increased costs to consumers before.  Such as directly below this post.  Here is a fresh example

A Colorado Administrative Law Judge recently denied an application by a group called Mile High Cab to operate 150 taxis in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties.  According to the Judge, “Mile High’s entry would harm Denver’s existing cab companies economically and ‘impede the ability of those carriers to provide safe, economical and efficient service.'”

This leaves just four taxi services in the Denver area, since one cannot operate a cab service without commission approval.  The Judge “agreed with experts for Metro Taxi, Denver’s biggest cab company, who concluded Denver’s supply of taxis is at or above capacity.”  Of course that is what Metro Taxi’s experts concluded — they were paid to reach and argue for that conclusion.

In the Denver Post article, an attorney for the start-up asked “If there are too many cabs, how come everyone has to wait so long for one?”  I have a better question.  If there are too many cabs, how come so many new entrants want to add more?  After Colorado eased restrictions on entry into the market, Union Taxi launched its service with 220 cabs, Mile High Cab sought permission to operate 150 cabs, two other startups have applied for permission to enter the market, and Yellow Cab is trying to add 150 taxis. 

These aspiring market entrants are all playing with their own money, so I suspect that they have looked at the market and concluded there is room for a few more cabs.  If they bet wrong and lose their money, it is not my problem.  No risk, no reward.  But because of the Judge’s decision, for now at least customers have fewer competitors to choose from and will inevitably pay higher prices. 

For example, “Mile High would charge 25 cents less per mile than two of the existing cab companies, would not charge extra for additional passengers or baggage and would offer superior customer service, said attorney Thomas Russell.”  Maybe their customer service would be great; maybe it wouldn’t.  Maybe their prices would be good; maybe they wouldn’t be. 

But isn’t that for the cab-using public to decide?

UPDATE: Complete Colorado says “Is this a protection racket or what?”  That is exactly what it is.  But the protection is for incumbent cab companies, not consumers.

I have pulled the Admin. Law Judge’s Decision and will have more comments after I read it.

Published in: on August 13, 2010 at 3:35 pm  Comments (3)  

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3 CommentsLeave a comment

  1. Thanks for your interest in Mile High Cab’s effort to get approval to operate in Colorado. Please feel free to contact me for more information.

    Your readers may wish to consult for more info.

    Tom Russell
    Attorney for Mile High Cab, Inc.

  2. […] out today on the Mile High Cab saga that covers some points similar to those I made previously here and here.  She makes an additional point that I did not previously cover that I would like to now […]

  3. Anyone who has ever tried to get a cab in Denver, and waited an hour or longer, or had the cab never show up, knows there is room in Colorado for more cabs.

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