Economics at your fingertips  

Free to cruise: Designing a market for tradable taxicab rights

David Seymour

Economics of Transportation, 2018, vol. 16, issue C, 1-20

Abstract: In metropolitan areas, taxicab regulation often has exclusive cruising regulations that prevent taxis affiliated with one jurisdiction from picking up passengers in another. When multiple cities are in close proximity, empty return trips occurring after taxis drive passengers from one jurisdiction to another results in inefficiency. This source of inefficiency can be eliminated by creating a combined affiliation and letting affiliated taxis pick up passengers in any jurisdiction. Under combined regulation, however, drivers may have an incentive to direct their search in a manner that leads to an allocation of taxis across locations that is not socially optimal. We develop a regulatory exchange market that maintains separate affiliations but provides drivers the ability to exchange the right to pick up passengers in each other's affiliated location. The regulatory exchange market is preferred to both exclusive cruising and combined regulation, and achieves the first-best in a large class of situations.

Keywords: Taxicabs; Regulation; Regulatory exchange; Exclusive cruising (search for similar items in EconPapers)
JEL-codes: R40 R41 R48 L51 D45 D47 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Economics of Transportation is currently edited by Mogens Fosgerau and Erik Verhoef

More articles in Economics of Transportation from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-07-22
Handle: RePEc:eee:ecotra:v:16:y:2018:i:c:p:1-20