Month: January 2015

Letter to the Editor – Prices, not bureaucracy, is what we need for taxis

My letter to the editor of the Busselton Dunsborough Times:

Jeff Devenny has called for more taxis but the Dept of Transport is the enemy in this fight, not his friend (Taxi time headache, Busselton Dunsborough Times, 23/01/2015). We already have a way of mediating changes in demand for goods and services and they are called prices. Basic economics tells us that when demand rises, prices goes up, which in turn stimulates supply by drawing in new entrants to the market with the prospect of making money and it is no different when it comes to taxis. If taxis were subject to genuine competition, the opportunity to make an extra buck in peak times would encourage more people to get out onto the roads, instead of staying at home. Unfortunately, our current system kills those incentives because the government has created a taxi cartel and has fixed prices, which artificially restricts competition and means that consumers pay for the shortage of taxis with their time, instead of with money.

A system where the government can hand out new taxi plates by its own discretion will never work, and we see that failure every time Busselton gets an influx of tourists. What taxi drivers and consumers need is an end to the government’s meddling in the taxi industry for the benefit of plate owners through deregulation, which would let prices do their important work in increasing supply of taxis at critical times and ensuring that consumers get a reliable, efficient and high quality service at peak times.

Lee Herridge
Yalyalup, Busselton.