Benefits and pitfalls of deregulating taxi markets: Can contrasted case studies help inform the debate?

Taxi and for-hire markets have traditionally been heavily regulated and public policymakers have been quite imaginative in regulating these markets, discriminating among market segments (hail, rank, and pre-booked), using different types of instruments (quantitative, qualitative, economic), and targeting different subjects (company, driver, vehicle). Cities and countries have experimented with the deregulation of taxi and for-hire services since the 1970s, aiming at raising the efficiency and competition in the service supply, lowering the prices, or both. Analyses of deregulated markets have often focused on the broad effects of deregulation at national level and paid limited attention to comparisons between regulated and deregulated markets. This paper discusses the effects of taxi deregulation in Stockholm (in relation to market size and structure, as well as pricing of services) in light of two contrasted case studies of regulated taxi markets in Helsinki (Finland) and Lyon (France). Original findings include observations as to some counterintuitive effects of deregulation, including high prices in both absolute (i.e., for the local context) and relative terms (i.e., compared with other cities).