Taxi and Limousines: The Last Bastion of Economic Regulation

The study herein is divided into the following sections: Part II reviews the history of regulation and deregulation of the transportation industry in the United States and focuses on common denominators which the limousine industry shares with other sectors of the transportation industry, such as airlines, trucking, railroads, and taxicabs; Part II analyzes the history of economic regulation on the limousine industry and evaluates its competitive characteristics; Part IV collects the available data about the limousine industry and creates an economic model which can be used to plot the effects of regulation; Part V analyzes the various rationales which have been set forth for entry and price regulation in the limousine industry and evaluates them according to accepted principles of economics. Part VI sets forth the proof that the rationales for economic regulation do not survive the scrutiny of applying generally accepted economic principles. Part VII This section concludes that economic regulation does inestimable harm to the consumer and the public. It also concludes, however, that there is ample, indeed compelling justification for non-economic regulation such as stringent health and safety regulation. The study that follows reveals that entry regulation in the limousine industry, as in the taxi industry, causes significant welfare loss to incumbent firms, potential competitors, employees, and most particularly to the consumer