Taxis a force for environmental good or evil?

MONDAY, 16 NOVEMBER 2009

China Post editorial (though I post the original text, as the CP editors have some creative ideas about the use of m-dashes):

The Ministry of Transportation and Communications (MOTC) last week announced it would research ways to balance supply and demand in the market for taxicabs. This is in response to findings of its Institute of Transportation (IOT) that supply of taxis far exceeds demand. Although taxi drivers work an average of 12.17 hours per day, it reported, they only carry an average of 18 fares and spend about 80 percent of the time driving an empty cab around.
This is indeed a sad state of affairs, but perhaps not for the reason the MOTC thinks. Like most government agencies, it clearly believes the solution lies in bureaucratic intervention. But perhaps the ministry isn’t aware, Taiwan has a free-market economy, and according to the theories of capitalism, without intervention—usually called regulation in transportation circles—market forces would naturally find a balance between supply and demand.
Taiwan is not alone, of course, in having regulated Taxi services. This practice is widespread around the world, usually implemented in the name increasing safety and improving customer satisfaction. But there are other ways of enforcing safety, and the factor of most importance to customers is cost. The only clear beneficiaries of regulation are the taxi companies and their drivers, who profit from a closed market, reduced competition and artificially maintained high fares.
If anything, therefore, there is an undersupply not an oversupply of cabs; a situation that arises from the reduction in demand, which is also a result of the artificially high fares. Deregulation, whereby any qualified driver could offer taxi services, from and to any location, and at any cost agreed with the passenger, would be the surest way to balance supply and demand.
But such a move would clearly need to be considered carefully, given the potential social and environmental impacts. Having yet more greenhouse-gas-producing vehicles driving round the nation’s streets, mostly empty but occasionally occupied, does not necessarily gel with the pressing need to prevent the greatest threat to humankind’s continued wellbeing in the 21st century.
The potential role of taxicabs in the battle against climate change is hotly debated. Some argue that increasing their number will simply increase carbon emissions; others that increasing their number and lowering their fares will encourage private drivers to abandon car and motorbike ownership.
Weaning the nation off private transport use—Taiwan is rapidly approaching having the unenviable figure of one car or motorbike for each member of its 23-million population—must make walking, cycling and mass transportation its goal. But in the medium term, taxis, a non-mass public transportation, can play a key transitional role.
The MOTC will need to take a more outside-the-box approach to the issue, however, and taxi firms and drivers will have to play ball rather than digging in their heels on policies aimed at reducing their environmental impact, whether within a regulated or deregulated system.
To reduce the effects of taxis driving around empty for long periods—other studies show figures lower than the 80 percent recorded by the IOT, but still around 60 or 70 percent—the Taipei City Government, for example, has long been proposing the establishment of designated stands where cabs would queue for fares. Although this would not mean the end to taxis’ traditional point-to-point services, since they could still be booked by telephone or online, this environmentally friendly move has and is being stubbornly opposed by taxi drivers who argue that having to use stands would be inconvenient for passengers and drivers. They obviously fail to imagine the levels of inconvenience that are predicted to result from not responding to the threat of climate change, a change that itself results from our increasingly convenience-driven lifestyles.
Other measures would be to require new taxicabs to be hybrid vehicles—which emit one-third to one-half the climate-change emissions of regular automobiles—and for local and central government agencies to abandon the policy of providing free or subsidized parking spaces and subsidized travel by private vehicle to their employees, but rather require them to travel by mass transportation or taxis.
Getting the general population to shift to using cabs could involve a congestion charge like that of London and other cities, should definitely include restrictions on single-occupancy in cars, might require subsidization of taxis in rural areas, and could even go as far as some form of control of private ownership of cars, like in state-managed Singapore, which has almost twice the density of taxis than New York and almost three times that of San Francisco.
In short, the MOTC and other government agencies do have a role to play in devising sustainable transportation policies that meet present and future requirements. While free markets operating under purely market-driven forces may know everything about economics, and may know a lot about balancing supply and demand, they will need to be carefully nurtured into learning more about environmental protection and balancing humankind’s short-term needs and greeds against its long-term survival.