Governance and economics of the taxi industry – an Economics Society of Australia seminar

In case you aren’t on the e-mail list for the Economics Society of Australia, here is the abstract of a talk they are hosting this week on one of the perennially difficult areas of Australian industry regulation to improve – the taxi industry.

Presenter: Peter Abelson

Topic: Governance and Economics of the Taxi Industry with Special Reference to Sydney

Time: 12:30 pm for 12.45 pm, Wednesday 14th of July 2010

Venue: Ground Floor East Seminar Room, Reserve Bank of Australia, 65 Martin

Place, Sydney

Cost: Free

RSVP: Please respond to if you have not already done so. ecosoc (at) ecosoc.org.au

The paper Peter is presenting discusses the regulation, performance and reform of the taxi industry in Sydney. Numerous regulations govern entry, industry structure, service quality and prices for the Sydney taxi industry (as in other large Australian cities). The paper finds few efficiency or social reasons for these regulations and taxi performance is poor. On plausible assumptions, the net benefits from free entry into the Sydney taxi industry are in the order of  $265 million per annum. These productivity and service benefits would doubtless be greater if accompanied by reform of the numerous restrictions on taxi services especially the anticompetitive control of the networks over all operators. The paper also discusses why governments are so resistant to reforming the taxi industry. The main reasons seem to be a lack of understanding of the benefits of market operations, a preference for out-sourcing monitoring of regulations to a few industry players, and above all a concern about the social costs and claims for compensation (although there is no legal basis for compensation). The paper shows that there are a variety of strategies to achieve reform and minimise compensation costs.

Dr Peter Abelson has a B.A. from Oxford University, M.Sc. (Economics) from the London School of Economics, and a Ph.D from London University. Peter is currently a managing director at Applied Economics (www.appliedeconomics.com.au) and has over 30 years of consulting experience in Australia and overseas, specialising in public economics and cost-benefit analysis. He also runs regular executive training courses for public servants. His recent work in Australia includes government pricing policy, major transport projects, evaluation of public health programs and hospitals, planning for infrastructure, and analyses of housing prices. He has worked for international agencies in many countries including China, India, Thailand, Kenya, Nigeria, Egypt, Zambia, Bolivia and Papua New Guinea. Peter held a Personal Chair at Macquarie University from 2001 to 2005. Currently he works with Sydney University, the University of New South Wales, the Australian National University and the Australian and New Zealand School of Government. Peter has considerable experience in Local Government, including eight years as councillor and two as Mayor of Mosman Council, Sydney.