Tuesday, June 3, 2008

Another example of government intervention screwing you

And another example of what "free government run healthcare" will be like.

Baltimore taxi drivers, being a reasonably ingenious sort, have figured out that sitting waiting for someone to call for a cab and going where the dispatcher tells them is more economical from a fuel usage standpoint than driving around looking for people waving their hands.

The most important passage from the article:
A fare increase might help, but taxi drivers such as Okiyi probably will have to struggle through the summer without any changes. Cab fares start at $1.80 and rise in 20-cent increments based on mileage and waiting time. A 55-cent fuel surcharge is added on top of those rates.

Baltimore's 1,000 cabs are regulated by the Maryland Public Service Commission, which evaluates twice a year whether industry costs have risen to a point where the charges can be passed on to consumers. LaWanda Edwards, a PSC spokeswoman, said the fuel surcharge has not changed since 2006, when the average price of a gallon of regular gasoline was $3.12.

Before that, the fuel surcharge was 15 cents. Any increase in the meter rate or fuel surcharge would not take effect until September, Edwards said.

No emergency surcharge in response to the present fuel price spike has been discussed, Edwards said. But the PSC evaluates the cab industry's rates every January and July, she said. Cab companies have not complained officially about their rising gasoline costs because they expect that they will have an opportunity for an adjustment after the PSC reviews the industry conditions next month, Edwards said.

In recent weeks, taxi companies in many towns and cities across the United States have asked for - and, in many cases, received - permission to increase their prices, either in the form of a fuel surcharge or an increase in meter rates.

Cab companies in Oklahoma City, St. Louis and small cities in Massachusetts and Indiana have obtained increases, according to news reports. And Chicago recently passed its first fuel surcharge for taxis, tacking on up to $1 per ride, the Chicago Tribune reported.

Meanwhile, taxi industries in Boston, Buffalo, N.Y., and Manchester, N.H., are pushing for fare increases or fuel surcharges to help get them through the fuel pinch.

"Nationwide, the industry is asking for rate relief, which means a fare increase," said Alfred LaGasse, president of the Taxicab, Limousine & Paratransit Association, a national trade group that represents about 1,000 transportation companies. "It's pretty universal. It's not limited to large cities or small cities."

On Friday, Montgomery County allowed its four cab companies, which operate about 650 cabs, to institute a 90-day emergency fuel surcharge of $1.50 per trip.

Notice the word "allowed". Since taxi drivers' and companies' prices are set by the government, they must take other actions in order to sustain their business. Which means worse service for you. Instead of being able to decide to hail that cab when it starts to rain on your walk home, you'll have to call for one, and wait 20 minutes (assuming they'll send a cab to someone who called from a cell phone without an address.)

This, of course, is the best example to the layperson, but price fixing by government has a number of drawbacks, as it always limits the choice of the consumer. Want a nicer cab, and willing to pay for it? Tough. Want to get the cab faster, and pay a little extra? Tough. Want a bargain cab that's a little less comfortable? Tough again.

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