The 24/7 regulation in the city of Madison has caused this city to have one of the highest fares when compared to cities similar in size. According to the text, the 24/7 rule requires that all taxi companies provide citywide service 24 per day and 7 days a week. In addition, annual licensing fees are $1,000 per company and $40 per vehicle plus $25 a driver.
For 17 years now, this regulation has affected the taxi market by creating entry barriers for new cab companies, creating expensive licensing fees and making the taxi application process rigorous. Expensive fees and a lengthy application process create entry barriers along with additional service requirements that pose a greater threat for the taxi market. The regulation created by the city caused entry to the taxi market a dead end for entrepreneurs. The taxi market is weak and non-competitive unlike unregulated taxi markets. Current cab companies in the city of Madison face high overhead costs to operate their businesses every year. Currently, three cab companies operate in the city of Madison that relatively have the same market share.
The city of Madison has a unique geography that plays a significant role of how taxi regulations forms. Riders cannot hail cabs in the city meaning riders …show more content…
Current cab companies will suffer a significant decrease in market share and a loss in fare prices. In addition, current cab companies will lose their exclusivity with holding licenses and serving regulated areas. New cab companies should support change from the status quo because the current regulation has a negative impact. Having new regulation and licensing fees creates the opportunity of making entry into the market easier and new cab companies can operated with one person. However, new cab companies could face lower market share if the taxi market is wide open for
For 17 years now, this regulation has affected the taxi market by creating entry barriers for new cab companies, creating expensive licensing fees and making the taxi application process rigorous. Expensive fees and a lengthy application process create entry barriers along with additional service requirements that pose a greater threat for the taxi market. The regulation created by the city caused entry to the taxi market a dead end for entrepreneurs. The taxi market is weak and non-competitive unlike unregulated taxi markets. Current cab companies in the city of Madison face high overhead costs to operate their businesses every year. Currently, three cab companies operate in the city of Madison that relatively have the same market share.
The city of Madison has a unique geography that plays a significant role of how taxi regulations forms. Riders cannot hail cabs in the city meaning riders …show more content…
Current cab companies will suffer a significant decrease in market share and a loss in fare prices. In addition, current cab companies will lose their exclusivity with holding licenses and serving regulated areas. New cab companies should support change from the status quo because the current regulation has a negative impact. Having new regulation and licensing fees creates the opportunity of making entry into the market easier and new cab companies can operated with one person. However, new cab companies could face lower market share if the taxi market is wide open for