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Taxis need more competition, not less

You're on the city council. You've got friends in the taxicab business. You want to keep their competition out and their profits up. How do you do it? Easily. You strictly limit the number of taxis permitted to operate and you refuse to regulate their rates.

That's what St. Petersburg does, and it explains why a 22-block ride from downtown to a close-in neighborhood costs a rather stiff $5. In Washington, nominally a more expensive city, the fare is only $3 for the longer journey from DuPont Circle to the Capitol. But in Washington, it is only the rates that are regulated, not the number of cabs.

St. Petersburg's current taxicab ordinance, written by the industry and rubber-stamped by the City Council in 1981, is back in the news because the four taxicab companies that share the city monopoly now want to rig it even more to their customers' disadvantage. Today, the council will consider an amendment to stop cabs based elsewhere from picking up passengers inside the city.

There cannot be many cabs taking advantage of the loophole, since it would involve considerable unprofitable deadheading. But if there are taxi operators who want to, why shouldn't the choice be theirs? Isn't that how things are done in a free society?

The only legitimate purposes of regulation are to assure the physical safety of customers and protect them from price-gouging. St. Petersburg's ordinance, which limits the number of permits to 162 and allows unrestrained fares, is an invitation to price-gouging. On the point of passenger safety, the city makes no provision for vehicle inspection and requires liability insurance only in the low, outdated amounts of $10,000 per person or $20,000 per collision, which the companies are not proposing to change.

Instead of tightening the ordinance further to restrict competition, the council should repeal the 162-permit limit and let the law of supply and demand determine both the number of cabs on St. Petersburg streets and the fares they charge, subject only to a requirement that companies not exceed their own posted rates. The city also should find ways to inform taxi customers of the competitive rates, such as regular publication and posting at City Hall. Customers would get a fairer shake. So would drivers, who would be free to cut better deals with the companies or go into business for themselves. Of course, this would cut into the companies' profits, but it would be faithful to the principles of free enterprise.

The same arguments the cab companies make were brought to bear on the Legislature in 1980 when it was considering the deregulation of Florida's truck and bus monopolies. For once, the lawmakers listened instead to common sense and opened the highways to competition. It has been a huge success.

In considering the cab companies' special pleading, the St. Petersburg council would do well to remember that its constituents who depend on taxis are often too poor or infirm to drive their own automobiles. It would also profit the council to consider the example of another favored monopoly, Paragon Cable, which is about to impose its third rate increase since getting its franchise extended a mere 18 months ago. Enough is enough.