Research Of Taxi Market Regulation In China

Taxi, of necessity for city public transport, is regulated on account of market failure problems such as asymmetric information, transaction costs. The reality, however, is far from the theory. Excessive regulation causes many side-effects such as inefficiency in its management and unreasonable protection of incumbent operators. This text studies the suitable regulation tactics of the urban taxi market by analyzing the theory and summarizing the experiences, which will offer reference for solving the problems in the taxi markets of our country.Innovation of this paper is to improve the Douglas's Model. This paper makes use of the model to analyse two market states under the two kinds of tactics(social optimum,social sub-optimal and free entry). Then, this paper analyses the current situation of the regulation of taxi markets which includes the history, development trend of regulation of taxi markets in the foreign countries. Finally, this paper summarize the policy and patter of regulation in our country, and submit policy suggestion.