Taxi Regulation in Washington D.C.

A very fascinating about taxi regulation in the District of Columbia in the United States and it is a good illustration of regulatory capture. The objective of a system of supply management by the use of medallions is to restrict access to create a “rent-value” for the permits of the players already in the industry. Considering the immense benefits of restricting competition and creating such a rent value, it is no doubt that someone already in the industry would support the idea.

In the past, I have studied the case of taxi regulation in Quebec and concluded that it does create an increase the value of permits by restricting competition and consumers are harmed (by longer waits and higher fares). I have reproduced the graphs of this study for your benefits and have included my data in the “data sets” page.


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