INTRODUCTION
Recently in Auckland there has been outrage at the high prices of taxi fares. The last significant change to the taxi industry was caused by government deregulation, in 1989. This economic inquiry report is going to investigate the impact of this government policy, and the unintended consequences for both consumers and taxi drivers.
SUPPLY AND DEMAND
Deregulation decreased the barriers to entry for people wanting to become taxi drivers. This is due to a removal of a restriction on the number of taxis operating in specific areas, thus anyone can become licensed. Only basic requirements, such as passenger safety, and testing metering, equipment exist (Gaunt, 1996). The effect of this has been a dramatic increase in the number of drivers not only in Auckland, as it is relatively easy to enter the industry. For example by 1994 in Auckland there had been a 67% increase in the number of taxi companies (Morrison, 1997). It is evident that the quantity of taxis available (supplied) has increased, due to reduced barriers to entry; suggesting that the taxi market should be competitive.
The demand for taxis is likely to have increased as the population of Auckland has increased; from 943,776 people in the 1991 census (Statistics New Zealand, 1997) to 1,415,550 in the 2013 census (Statistics New Zealand, 2013). Consequently there should be more people requiring a taxi service.
IMPACT ON CONSUMERS
The effect of deregulation on supply should have provided customers with decreased fares due to the increased numbers of taxis competing for their custom. However in reality this is not true or there would not be people being charged $198 for a 37 kilometre journey (Tait, 2014a). A reason for this is that pre-1989 fares needed to be appr...
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...t and Planning A, 29(5), 913-928.
Statistics New Zealand. (1997 October). NEW ZEALAND NOW: People and Places. Retrieved from http://www2.stats.govt.nz/domino/external/pasfull/pasfull.nsf/84bf91b1a7b5d7204c256809000460a4/4c2567ef00247c6acc256b03000936c4/$FILE/PEOPLEAN.PDF
Statistics New Zealand. (2013, October 15). 2013 Census Usually Resident Population Counts from http://www.stats.govt.nz/browse_for_stats/population/census_counts/2013CensusUsuallyResidentPopulationCounts_HOTP2013Census.aspx
Tait, M. (2014a, May 6). $198 Auckland airport taxi: Taken for a ride. The New Zealand Herald. Retrieved from http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11249994
Tait, M. (2014b, May 8). Former Cabbier: Three-year struggle soul-destroying. The New Zealand Herald. Retrieved from http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11251413
whether or not that city had enough gates for the new carrier, and whether the
must give a great deal of respect to the New York City taxi drivers because they
Jonathan Kay’s “Fare Share” has many weaknesses that make his argument not effective when writing his article. Kay’s argument talks about how Uber is stealing taxi drivers of their livelihoods and how Uber is taking over the taxi monopoly. Weaknesses found in this article was when Jonathan Kay makes Uber look bad when talking about their flashy app which seems to kind of promote it even more, and with a little more research he can find other taxi apps. To add on he seems to write it very tongue-in-cheek. Furthermore, Kay also lacks evidence to support what he says because some of his arguments are weak and basic. Another weakness would be that he left the reader wondering what he is trying to prove in his argument about Uber, he seems to be all over the place with his argument. Overall, this was a weakly written article.
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Narrator: (Taxi drives off in the background) “The taxi system worked very well until the city started to demand that taxi drivers charge the standard 45 cents opposed to the 10 cents that was being charged. If they refused to do so the cab driver would be be arrested. Most boycotters could no longer afford to pay for taxis and had no good transportation solution.”
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In 1978, deregulation removed government control over fares and domestic routes. A slew of new entrants entered the market, but within 10 years, all but one airline (America West), had failed and ceased to exist. With long-term growth estimates of 4 percent for air travel, it's attractive for new firms to service the demand. It was as simple as having enough capital to lease a plane and passengers willing to pay for a seat on the plane. In recent news, the story about an 18-yr British...
smuggled in to the convent or the sound of a far away cab rolling along
Before other forms of the eruption of other transportation networking systems, the taxi was the number one ride-hailing service. It was the initial motor vehicle used to convey passengers between the locations of their choice. That is until Uber came along. Uber is a new and innovative way to travel, due to the efficiency, availability, and convenience the service provides which makes the ride the driver’s and passenger’s experience more enjoyable. I chose the topic of Uber vs. Taxi because due to the fact that cars are the most used and favored mode of transportation, I wanted to compare the original use of taxis to the expansion of normal people being able to use their car to make some cash as well.
frustrated because every time they needed a taxi, they had to call two or three taxi operators and
In the past year, according to BITRE data, there has been an increase of 1.7% for the amount of total passengers carried on the Australian Domestic network. Accompanying the increase in total passengers carried was an appropriate increase in RPK (Revenue Passenger Kilometres) at 2.0% and an increase of ASK (Available Seat Kilometres) at 3.2%. This data tells us that the past year ...
Budd, T. (2014). Airport ground access and private car use: a segmentation analysis.Journal of transport geography, 36, 106-115. doi:10.1016/j.jtrangeo.2014.03.012
Economies thrive on the ability of mobility. Mobility allows people to go to work, attend school and travel far and wide by using some form of transportation. It allows people and ideas to mix more freely. Over time, mobility has taken many forms, from the backs of animals, to carriages and now the automobile. Since the invention of the automobile, we have been able to decrease transportation costs, travel vast distances and decrease travel times. We are able to facilitate relationships, foster trade between places and find better jobs. However, due to the inaccurate pricing of the roads, driving cars has turned from an innovation to pure frustration. The problem is traffic congestion; the increased usage of cars has created slower speeds and longer travel times due to greater demand for the road than the road has to offer. Roughly 3.4 million Americans endure extreme commutes, in which the trip to work and back eats up at least three hours of each day (Balaker, Staley 2006). Congestion slows life down by causing massive delays, eating away at valuable time and productivity. This has become a major issue because people are stuck in traffic when they do not need to be and conditions will only continue to get worse without government intervention. Many solutions have been offered and discussed but few have been implemented. This paper will serve to outline the economic theory behind traffic congestion, alternative policy options there are for dealing with traffic congestion and ultimately what the best strategy is to solve this problem. The solution I propose is to price the highways accurately to achieve the optimum number of vehicles on the road.
On the contrary, using private car is the same convenience of travelling as public transport. When people are in a hurry, they can suddenly go ev...