Commentary

Boston Globe Advocates for Taxi Deregulation

The Boston Globe (March 25, 2011) has come out in favor of deregulating taxicabs in Boston. Boston, like many large cities, uses “medallions” (permits to drive taxis) to limit the number of cabs that circulate in a city. In almost every city that has adopted the medallion system, a shortage of taxis exists, driving black market prices to hundreds of thousands of dollars. The economic effects are pernicious, locking out competitors and needlessly driving up prices. For more on Boston’s debate, see my blog post here.

As the Globe editorial observes:

“The city [Boston] could start by reforming its anachronistic licensing system, which caps the number of cabs at 1,825. The cap made sense when it was put in place during the Great Depression, because it protected cab operators threatened by waves of out-of-work men flooding the streets with cheap rides. But back in the 1930s, most taxi drivers owned their own licenses — known as “medallions.” Today, a great many medallions are owned by investors who lease them to drivers at high rates. It’s these investors, many of whom do not even live in the area, who reap the benefits of the regulatory system.”

Many regulators and taxi company owners (who benefit directly from inflated prices) bizarrely argue that deregulation would be an infringement on their propert rights–as if the monopoly rents created by bad public policy are a legal entitlement. Fortunately, the Globe did a little research and found that these artificially high prices are not entitlements. The editorial continues:

“Mark Cohen, Boston’s chief taxi regulator, has acknowledged that this regulation system [medallion system] needs to change. But he has long maintained that the city’s hands are tied. By some accounts, it would be illegal for the government to intentionally devalue licenses that are already on the market. But according to Lee McGrath, an attorney who successfully defended Minneapolis’s 2007 effort to deregulate its taxicab industry, federal law would allow Boston to increase the number of medallions, even if new licenses end up driving down the value of existing ones. The city should reinvestigate its legal options, and Cohen should consider a plan that would increase the number of medallions by at least 2.5 percent every six months over the next five years, a schedule that would allow the market to adjust gradually.”

For more on taxi deregulation, read an excellent survey by Adrian Moore and Ted Balaker on whether economists “reach a conclusion” on taxicab regulation in the professional watchdog journ EconJournal Watch (January 2006). Also, Reason Foundation’s study on inner-city entrepreneurship, “Giving a Leg Up to Boostrap Entrepreneurship,” surveys barriers to entrepreneurship in several cities, with a section devoted to taxicabs. My colleague Harris Kenny has been riffing on this topic in Denver, too.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.

Staley is the author of several books, most recently co-authoring Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century (Rowman & Littlefield, 2008). Texas Gov. Rick Perry aid Staley and Moore "get it right" and world bank urban planner Alain Bartaud called it "a must read for urban managers of large cities in the United States and around the world."

He is also co-author, with Ted Balaker, of The Road More Traveled: Why The Congestion Crisis Matters More Than You Think, and What We Can Do About It (Rowman and Littlefield, September, 2006). Author Joel Kotkin said, "The Road More Traveled should be required reading not only for planners and their students, but anyone who loves cities and wants them to thrive as real places, not merely as museums, in the 21st Century." Former U.S. Secretary of Transportation Mary Peters said, "Balaker and Staley clearly debunk the myth that there is nothing we can do about congestion."

Staley's previous book, Smarter Growth: Market-based Strategies for Land-use Planning in the 21st Century (Greenwood Press, 2001), was called the "most thorough challenge yet to regional land-use plans" by Planning magazine.

In addition to these books, he is the author of Drug Policy and the Decline of American Cities (Transaction Publishers, 1992) and Planning Rules and Urban Economic Performance: The Case of Hong Kong (Chinese University Press, 1994).

His more than 100 professional articles, studies, and reports have appeared in publications such as The Wall Street Journal, The New York Times, Washington Post, Los Angeles Times, Investor's Business Daily, Journal of the American Planning Association, Planning magazine, Reason magazine, National Review and many others.

Staley's approach to urban development, transportation and public policy blends more than 20 years of experience as an economic development consultant, academic researcher, urban policy analyst, and community leader.

Staley is a former chair for his local planning board in his hometown of Bellbrook, Ohio. He is also a former member of its Board of Zoning Appeals and Property Review Commission, vice chair of his local park district's open space master plan committee, and chair of its Charter Review Commission.

Staley received his B.A. in Economics and Public Policy from Colby College, M.S. in Social and Applied Economics from Wright State University, and Ph.D. in Public Administration, with concentrations in urban planning and public finance from Ohio State University.