The Silence at the Stands: Agony in the Portuguese Market for Taxis

Daniel Murta

Notas Económicas, 2014, issue 39, 36-47

Abstract: Taxis cannot come cheap. You are driven by a professional with all the flexibility of cars minus several inconveniences. And yet … why aren’t they? Drivers will grumble about prohibitive gas prices not covering lousy fares. The root, and truth, of the matter lies in service: clients, miles… and the dearth of them.The market fits a description of a free-entry cartel, run by associations, tolerated by a captured regulator, where neither entry nor exit budge price. For consumers, it is a raw deal. Meanwhile, monopoly profits are squandered among the maximum of deadbeats, who barely get by. Better if regulation evolved from the capture by the drivers’ organizations, towards price and licenses set according to traffic levels, after a clearing negative price shock. Does it matter? Taxis can be precious in bridging the gap between the shunned efficient public transports and environmentally unsound and pricey motoring.

JEL-codes: L13 L44 L59 L91 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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