this post was submitted on 07 Dec 2023
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Taxi's where I live are prohibitively expensive (Belgium), so most people generally only use them when they can book ahead of time and negotiate a reasonable price. A spur of the moment taxi is for people with too much money or for emergencies.
Because taxi's are so expensive, there is little demand. Because there is little demand, taxi's do not find many customers. Because taxi's don't find many customers (and are badly organized), they spend a lot of time idle/empty. Because they spend a lot of time idle and driving empty, they charge an exorbitant amount to the few customers that they do get.
If they could spend less time idle/empty, they could offer better prices, increase demand, gain advantages of scale, ...
It's the same deal with general transport firms: a good firm will always try to get a return cargo. The cost of material and labor is the same, but efficiency reduces the cost for the customers of the good firm.
In contrast to Belgium, in Athens and many other places, taxi's (often basically mini buses) are flexible, plentiful and affordable. But they are constantly driving customers around, they are being efficient and because they are efficient, cost for the customer is low and they get many customers.
The problem in Belgium with the established taxi system is organisation of the service first and foremost.
The key is to figure out why Belgium's taxis are so expensive in comparison to other places.
What are the differences in regulation?
Are Belgian taxi drivers each completely independent operators responsible for covering all their costs with only one driver while other places have vehicles shared by multiple drivers?
What are the differences in standards of living and employment opportunities? In my experience, people migrate away from low paying jobs quite quickly when the opportunity arises. For example, in Canada you won't find anyone other than management deliberately making a career out of working in fast food because the pay and working conditions are crap. The only reason anyone works fast food is because of lack of better options. That's what's killing fast food in certain places in Canada. There have been so many well paying jobs in the oil sector for long enough that in places like Fort McMurray, McDonald's and Tim Hortons have often had trouble staffing their outlets.
It's regulatory capture and people know, but ... politics. There is no incentive for more efficiency, since the holders of the licenses are making enough, because it's a captured market... It's a protected sector with a limited number of licenses and the amount of licenses is very limited because the market is so small. A real chicken and egg situation.
Taxi license driver holders are almost exclusively Belgian natives. Shuttle drivers come from all over the eu, but they're not allowed to pick up fares, only work through reservations or on fixed trajectories.
Thanks for the insight. Regulatory capture is a problem with everything, it seems.