The Economics Analysis Of The Regulation On Public Taxis

Taxi, relating to public interests, is a city public utility that provides public services. With the rapid growth of our country economy, taxi has been growing fast and becoming an important part of city public transportations. However, taxi has been regarded as a business which was filled with social contradictions, during to many unexpected incidents involving mass participation has happened these years. It proves that the interests contradictions in this business has been severing and becoming social unstable factors, which deviates from the strategic objective of building a harmonious society. Although the appearance of these problems and contradictions are various, it deeply relate to the management system and the concession system which is the core of the taxi business. A representative submitted a proposal at the National People's Congress in 2009.He want the government to solve the question fundamentally by remodeling the government's unreasonable regulation policies. What should the government do? The author thinks that the first thing we must be considering is the specific technical and economic characteristics of the taxi business. To judge the circumstances of taxi business, we require comprehensive knowledge. The economic analysis is the most important knowledge. In the opinion, I will analyse the government regulation policies profoundly with classical theory in economics in this article. The main content of the paper containing 33000 words is divided into five parts.The first part:Raising questions. Points out that the root of the contradiction on taxi is unreasonable regulation policies.The second part is mainly talk about the actuality of taxi industry. Firstly, the property of taxi industry is public utility that provides public services. Secondly, I introduced the development of the taxi industry and the measure of government restriction on taxi industry. Thirdly,I discussed the contradictions on taxi business.The third part is the key part of this paper. It mainly analyzed the rationality of government control on the taxi industry. This section discusses from two perspectives:the motivation of government control and the actual effect of government control. In this part, I emphatically points out why the government regulation policies of taxi industry are unreasonable. First, the government is not the natural defender of the public interest. It is a false proposition that the taxi control policy which is concerned as a kind of public policies, is formulated to meeting the most interests. Second, the government is not omnipotent. It also has its own defects, such as information asymmetry. Besides, it is the peculiar economic attributes of taxi industry which made the government regulation policies surely fail.The fourth part:The inappropriate control of the government not only make taxi market unable to effectively play its adjusting function, but also caused the huge waste of social costs. Furthermore, in order to solve the problems raised from unreasonable regulation, the government has to take more control which will cause more problems, and develop as a vicious cycle.The fifth part:I will give some suggestions to the reform of taxi industry. In the consideration of the brief introduction of taxi industry in Taiyuan model and Wenzhou model, and summing up the basis of experiences, the author suggests that the government open the taxi market, cancel the provisions of access discrimination, quantity control and fixed price controls, and only set a limit for the taxi price.