City Council Not Equipped to Regulate Taxi Fares

Published June 1, 2007

Dear Editor:

Regarding Ald. Pat O’Connor’s call for hearings on taxi fare hikes, am I the only person in Chicago wondering why the City Council should be setting cab fares in the first place? It doesn’t set prices for food, clothing, rent, or health care. What special skills or knowledge do aldermen have that consumers and entrepreneurs lack?

Is the concern that taxis would charge too much? This justifies only requiring that cabbies post their prices on the outside of their vehicles, or at worse, price caps. Why not allow cabbies to compete by charging less than the maximum allowed price?

The possible threat of price gouging emerges only if there are too few cabs to meet the demand. That may be the case, since the City Council also controls how many cab licenses are issued. Which leads one to wonder, why is the City Council determining how many taxis Chicago needs?

Joseph Bast ([email protected]) is president of The Heartland Institute.