Voters of Kenosha, Wis., on April 7th cast an overwhelming majority against the operation of ten cent taxicabs in the first city of the United States to operate its entire mass transportation system with trackless trolley vehicles. Although the vote was a referendum on the repeal of a section of the ordinance passed in 1934 which established a minimum of 15 cents and a maximum of 25 cents per taxi passenger, thereby opening the way for cut-throat competition, the ballot offered the public an excellent opportunity to express their appreciation of the high standard of service maintained during a winter of heavy snows, icy streets, and extremely low temperatures.Any time a business lobby refers to "cut-throat competition," it's almost surely referring either to price cutting behavior by some practitioners, whether they be operating busses or cars for hire. The jitney is a precursor of the taxicab, although, beginning in the 1920s, they would cruise along streetcar or bus routes, picking up a rider or two headed for a destination elsewhere along the car line, offering both a lower fare and a faster delivery. The streetcar operators, in particular, chafed at such competition as they were often also subject to municipal regulation holding fares down -- thus did the nickel fare persist from the end of the nineteenth century until after the first World War. And any measure to limit the commercial freedom of jitneys, including Kenosha's extension of rate regulation to cars for hire, had the support of the streetcar companies. But check out the claims Mass Transportation makes about the taxi drivers. Go directly to the club-car if you hear an echo today.
Drivers of the taxicabs were in reality victims of the taxicab company as the wages even under the present minimum 15 cent and maximum 25 cent rate of fares average very low for most drivers. Income per day of taxicab drivers is said to run from as low as 25 cents net up to $1.50 per day during the week and a good Saturday may net about $4. The drivers pay the cab company $2.00 per day plus 10 cents for insurance for the use of the cab for a 12-hour period and 60 miles of operation. After 60 miles, the driver must pay a stated fee per mile. Formerly there were up to 40 cabs in a city of approximately 50,000; today there are about 30 cabs in operation. Repeal of the ordinance undoubtedly would result in more cabs and more fees from drivers.Thus does the trackless trolley operator benefit from a law suppressing competition "in the public interest." Thus, also, does the taxicab company benefit. It is by the dynamic of suppressing price competition so as not to be cut-throat, that taxi-medallions, in jurisdictions where those are part of the regulatory apparatus, take on their great value.
And thus does the incorporation of the taxi companies into the cartel fail to protect the public interest. For the very incentives that led the flivver-owner of the 1920s to seek a gain from trade by selling rides to passengers waiting at the car-stop are the same incentives that lead the car-owner of today to seek a gain from trade by participating in Uber. But the distributed network in Uber is less costly to organize, with no daily car-hire fee or insurance paid to the central office, the way the traditional taxi company does. But it should come as no surprise that transit authorities and taxi companies might make common cause to suppress Uber or otherwise incorporate ride-sharing into the cartel.
I'm not sure which of the transportation trade journals is the successor to Mass Transportation. The journal was circulating during the second World War, during which it published a Guide to Hiring Women. That might be for another day.