Is there somewhere where a government created scarcity of licenses actually works? The only things I can think of is resource specific activities (e.g. hunting licenses).
If anyone could drive a cab, the profession might only barely pay a living wage, as each driver would get less passengers, and you'd get a race to the bottom -- and the streets would be more congested too.
To me, the biggest question with taxis is scheduling and demand -- how to get extra cabs to the places/times people need to take cabs from, and the fact that this isn't really compatible with people who want to drive a cab on a predictable block schedule.
According to the article, it hardly does that now:
shortly after the most recent fare raise in 2006 [...] an independent consulting company found that drivers’ take-home pay for a 12-hour shift averaged $158. (Last year the NYTWA calculated it at $96.) By all accounts, it’s slipped since.
So, something around $10 per hour.
I don't think that drivers' quality of life is motivating this policy.
I agree. I've never successfully gotten a cab to take me to LGA, for example. (Someone is getting them, though, because I've never not gotten a cab from LGA.)
The distribution throughout the city is also strangely uneven. I used to live a 6th/27th and even at 3 am on a Tuesday, 6th Ave. was densely packed with cabs. But over in Brooklyn Heights where I live now, I think I've seen a cab once or twice. The one time I took a cab in Brooklyn, I had to explain to the driver how to get to a major through street. (The explanation was: "I never leave Manhattan.")
Overall, it doesn't work very well, and 99.99% of the time I take the train. Much cheaper anyway.
You probably already know this, but always get in the cab first (if possible), then tell them you're going to LGA. Cabbies aren't allowed to turn down a fare in city limits once you're already in the cab. If they protest, snap a photo of their badge # and tell them you know the law - most will give up and take you where you want to go. It's a pain in the ass, but you gotta do it sometimes.
That isn't the case in London, widely thought to have the best taxi service in the world. There, anyone can pass a demanding standard examination and having done so can drive a cab. Anyone can build a vehicle that meets a standard inspection, and once passed that vehicle can be used as a cab. No limit on the number of drivers, no limit on the number of taxis, both inspected but not limited. The result is that different drivers work different convenient hours, some full time and some part time, with larger numbers of cabs available at rush hours and other times of heavy demand. All the drivers know how to drive well, all the taxis are clean and in perfect shape, and there's always one available when you need it. This is what makes it truly possible to live better in central London without a car than with one.
All the schemes to forbid more competitors simply hand profits to taxi operators and produce poor service for taxi users. As usual, government regulations are captured by the regulated industry to exclude competitors.
This test is legendary. There was an interesting study done on the brains of the drivers who pass it:
http://blogs.discovermagazine.com/notrocketscience/2011/12/0...
I wonder if the very difficult examination serves to act as a natural limit on the number of taxis?
Because my question is, what is the supply-and-demand reason that there are only 21,000 cabs in London, instead of, say, 50,000 or 200,000?
Um, no. The initial value on the meter is set in such a way that cabbies make more money from picking up lots of fares that from picking up one and getting it hopelessly stuck in traffic.
Incidentally, private jitneys (where legal or tolerated) evolved a different rate system that's even better for consumers - the "rate card". Instead of a big, expensive, complicated piece of machinery, there's a map of the city divided into "zones" and a flat rate to travel within one "zone" or to cross X number of zones. The map might be printed on a sticker on the door (so you see it before you enter the cab) or on a playing card or business card the driver displays or hands you.
As a passenger, you then know the cabbie has no incentive at all to waste time in traffic and you know what the fare will be at the time you get in.
Regulators don't like that system because they can't reliably tax unmetered trips.
* The driver needs to have an endorsement on their drivers' license allowing them to operate a small passenger service vehicle. To get this, they need to pass a 'fit and proper person test' (which disqualifies many people with past convictions) and have completed a course.
* The driver needs to be employed by an approved passenger service. It currently costs NZ$449.80 to apply to start a new one - the laws about when the government must grant them are here, http://www.legislation.govt.nz/act/public/1998/0110/latest/DLM434609.html and there are no direct limitations on the number of taxis.