Regulatory Reforms
Policy Changes To Encourage Transportation Service Competition, Innovation, Diversity and Efficiency
~~~~~~~~~~~~~~
Victoria Transport Policy Institute
~~~~~~~~~~~~~~~~~~~~
Updated
22 July 2008
This chapter
describes changes to motor carrier and taxi regulations that can
encourage competition, innovation, diversity and efficiency.
Regulatory Reform involves changing motor carrier and taxi regulations to encourage competition, innovation, diversity and efficiency in the provision of transportation services. Many jurisdictions have rigid restrictions on transportation services. Firms attempting to introduce a new transportation service, such as commuter express buses, Shuttles and Jitneys or shared taxies, often prohibited altogether or face excessive regulation. Taxi service is often highly regulated in ways that limit consumer choice and affordability (Taxi-L).
Many of these regulations are outdated or unnecessarily restrictive. Although there are reasons to regulate transportation services to maintain quality, predictability and safety, unnecessary regulations can be reduced, and regulation objectives can be changed to address specific problems while encouraging competition, innovation and diversity (Klein, Moore and Reja, 1996).
Transit service Regulatory Reform and privatization are sometimes implemented in conjunction with large reductions in transit funding or without adequate enforcement of service and safety standards, resulting in overall reductions in the quantity and quality of transit service. This can result in shifts from transit to automobile travel, contradicting TDM objectives.
Land use regulations may also require reforms to allow more efficient Parking Management and other Smart Growth policies (Hirschhorn, 2001).
Transportation regulation reforms usually require state or provincial legislative changes, and administrative changes by regulatory agencies, such as motor carrier commissions. Taxi Service regulation reforms usually require changes by regional or local governments. Regulation Reform may face various types of opposition, and so may require Change Management strategies.
Increased transit service choice and competition can improve services, resulting in more use of alternative modes and reductions in automobile travel. Actual travel impacts depend on the nature of these reforms, the response by transportation service providers, and the level of demand for new transportation services.
Table 1 Travel Impact Summary
|
Travel
Impact |
Rating |
Comments |
|
Reduces total traffic. |
2 |
Varies depending on
conditions. |
|
Reduces peak period
traffic. |
1 |
Some, but not all service
innovations are directed at peak-period travelers. |
|
Shifts peak to off-peak
periods. |
0 |
|
|
Shifts automobile travel to
alternative modes. |
2 |
Some, but not all service
innovations would substitute for automobile travel. |
|
Improves access, reduces
the need for travel. |
0 |
|
|
Increased ridesharing. |
1 |
Some service innovations
can be considered a form of ridesharing (e.g., commercial vanpooling). |
|
Increased public transit. |
3 |
Most service innovations
can be considered a form of public transit. |
|
Increased cycling. |
0 |
|
|
Increased walking. |
0 |
|
|
Increased Telework. |
0 |
|
|
Reduced freight traffic. |
0 |
|
Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.
Benefits include improved transportation choice and quality of service for non-drivers, and reduced automobile travel. Competition and innovation can increase efficiency, although cost savings may be economic transfers, not true efficiency gains, if competition simply drives down transit operator wages, increasing trips per operator-wage-dollar, without actually increasing productivity. More competitive transit service supports higher-density, urban infill, although some services (such as commuter bus service) may encourage longer-distance commutes.
Costs include transition costs (the costs to agencies of changing their practices), and loss of monopoly profits by some transportation service producers. In some circumstances, inefficient competition can reduce service (although this can be avoided by appropriate regulation). If Regulatory Reform and privatization are used as an excuse to reduce transit subsidies or lack enforcement of service quality and safety standards, there can be a reduction in transportation service quantity and quality.
Table 2 Benefit Summary
|
Objective |
Rating |
Comments |
|
Congestion Reduction |
1 |
Improves transit and taxi
service. |
|
Road & Parking Savings |
1 |
Improves transit and taxi
service. |
|
Consumer Savings |
2 |
Improves transit and taxi
service. |
|
Transport Choice |
3 |
Improves transit and taxi
service. |
|
Road Safety |
0 |
Safety impacts tend to be
mixed. |
|
Environmental Protection |
1 |
Improves transit and taxi
service. |
|
Efficient Land Use |
0 |
Improves transit and taxi
service, which encourages higher-density land use, but may also encourage
some longer-distance commuting. |
|
Community Livability |
1 |
Improves transit and taxi
service. |
Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.
Regulatory reform can reduce existing policies that favor particular groups, thus increasing horizontal equity. It can improve affordable transportation options, such as jitney services and lower-priced taxis, which benefits lower income people and non-drivers, and increases basic mobility options. Competition can reduce transit and taxi operator wages, which may be considered regressive.
Table 3 Equity Summary
|
Criteria |
Rating |
Comments |
|
Treats everybody equally. |
2 |
Reduces regulations that
currently favor certain groups. |
|
Individuals bear the costs
they impose. |
1 |
Can reduce automobile
externalities. |
|
Progressive with respect to
income. |
2 |
Improves affordable
transportation, but may reduce wages for some middle-income employees. |
|
Benefits transportation
disadvantaged. |
3 |
Improves transportation
choice. |
|
Improves basic mobility. |
2 |
Improves transportation
choice. |
Rating from 3 (very
beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.
Regulatory reforms can be implemented in most geographic conditions. They are implemented primarily by state/provincial and local governments.
Table 4 Application Summary
|
Geographic |
Rating |
Organization |
Rating |
|
Large urban region. |
3 |
Federal government. |
1 |
|
High-density, urban. |
3 |
State/provincial
government. |
3 |
|
Medium-density,
urban/suburban. |
3 |
Regional government. |
1 |
|
Town. |
3 |
Municipal/local government. |
3 |
|
Low-density, rural. |
3 |
Business Associations/TMA. |
0 |
|
Commercial center. |
3 |
Individual business. |
0 |
|
Residential neighborhood. |
3 |
Developer. |
0 |
|
Resort/recreation area. |
3 |
Neighborhood association. |
0 |
|
|
|
Campus. |
0 |
Ratings range from 0 (not
appropriate) to 3 (very appropriate).
Institutional Reform
Regulatory Reforms support and are supported by Institutional Reforms, TDM Programs, Market Reforms, Smart Growth and Least Cost Planning, all of which involve changing current transportation planning and funding practices. Regulatory Reforms can support Taxi Improvements, Transit Improvements and Shuttle Bus service. They may be needed to implement some Rideshare, Commute Trip Reduction, Tourist Transport Management and Campus Transport Management programs that are constrained by existing regulations (for example, rules governing the qualifications of a vanpool or jitney driver).
Existing transportation service providers, including transit
agencies, private bus companies with regulated routes, and owners of taxi
licenses, tend to oppose regulatory reform. Stakeholders that support reform
may include transportation agencies, private bus companies that want to compete
on regulated routes, transit user groups (e.g., Bus Riders Union in
Barriers include the difficulty of creating sufficient political support for change, and the technical difficulties of changing existing regulations and practices. Transportation and taxi service providers that benefit from existing regulations often mobilize significant opposition.
· Regulatory reform should
encourage competition and innovation while protection transportation service
quality.
· Reforms should be
implemented predictably, and if necessary, gradually.
· Businesses and consumer
interests should be involved in developing regulatory changes.
|
One
evening a police officer pulls a car over and walks up to it. The driver
rolls down his window and asks politely, “What’s the problem officer?” The
policeman says, “Your left brake light isn’t working.” Just
then, a women in the passenger seat says, “I told him to take the car in for
maintenance last week, but he didn’t bother.” The
driver looks annoyed and says, “Please don’t interrupt.” The
policeman continues, “And I saw you running a red light a few blocks
earlier.” The
passenger says, “I told him to stop, but does he listen? No! He keeps right
on going.” The
driver turns to her frustrated and says, “Quite down.” The
policeman adds, “And just before the light I clocked you driving 50 in a 30
mile-per-hour zone.” The
passenger leans over again and says in a shrill voice, “I told him to slow
down. But did he listen? No! He always ignores me.” The
driver turns and yells exasperated, “Hey, didn’t I just tell you to shut up?
Now, don’t say another word or you’ll be sorry.” The
police officer then looks at the women and asks, “Does he always talk to you
this way?” “Only
when he’s been drinking,” she says. |
Taxi
service has been deregulated in many countries, including the U.S,
1. Barriers controlling entry
were removed, so that an operator can have as many taxicabs as desired. This
relieved the county councils of their former task of estimating the demand for
taxi services in each operating area.
2. Fare controls were removed,
so that taxi companies became to be able to set their own fares. However, they
were required to inform customers about the fare prior to trips, and taxicabs
must be equipped with receipt writing meters.
3. The requirement for all
taxicabs to belong to a radio booking centre was abandoned. At the same time,
in order to stimulate competition between centres, publicly owned centres were
established in the market as an alternative to the existing privately owned
centres.
4. Geographically restricted
operating areas were eliminated.
5. Strictly regulated operating
hours were removed.
Many
In
1991, the city of
Like
other large
Minority
organizations supported reforms. The restrictions on taxi licenses, fares, and
service levels all but prevented low-income drivers from starting their own cab
companies, and reduced the quality of service in lower-income neighborhoods.
The
RSC rewrote
· Removed the overall
limitation on the number of taxis that can be licensed.
· Allows taxi companies to set
fares, with some constraints on maximum fares.
· Eliminates arbitrary rules,
such as requiring taxi drivers to wear a special badge and cap, and specifying
the number of seats taxis could have.
· Allows taxis to
"cruise" for customers.
· Provides greater flexibility
in safety regulations.
· Allows special taxis to
carry passengers in wheelchairs.
· Allows jitney businesses
greater operational flexibility.
· Allow jitney businesses to
provide a "charter service."
John Boroski and Gerard Mildner (1998), An Economic Analysis of Taxicab Regulation in Portland, Oregon, Cascade Policy Institute (www.taxi-l.org/portland01.htm).
GTZ (2003), Sustainable Transportation: A
Sourcebook for Policy-Makers in Developing Countries, (www.sutp.org), by the Sustainable Urban
Transport Project –
Joel S. Hirschhorn (2001), New Community Design to the Rescue, National Governor’s Association (www.nga.org).
Choong-Ho Kang (1998), Taxi Deregulation: International Comparison, PhD Dissertation, Institute for Transport Studies, The University of Leeds (www.taxi-l.org/kang0898.htm#c3).
Daniel Klein, Adrian Moore and Binyam Reja (1996), “Free to
Cruise: Creating Curb Space for Jitneys,” Access,
No. 8 (www.uctc.net), Spring 1996, pp. 2-6.
Daniel Klein, Adrian Moore and Binyam Reja (1997), Curb Rights: A Foundation for Free
Enterprise Urban Transit, Brookings Institution Press (www.brookings.edu).
LEDA - Legal and Regulatory Measures for Sustainable Transport in Cities (http://cordis.europa.eu/transport/src/leda.htm).
Todd Litman (2005), Smart Growth Policy Reforms, Victoria Transport Policy Institute (www.vtpi.org); available at www.vtpi.org/smart_growth_reforms.pdf.
Richard Meakin (2003), “Urban Transport Institutions,” Sustainable Transport: A Sourcebook for Policy-makers in Developing Cities, published by the Sustainable Urban Transport Project – Asia (www.sutp-asia.org) and Deutsche Gesellschaft fur Technische Zusammenarbeit (www.gtz.de).
Adrian T. Moore
and Tom Rose (1998), Regulatory Reform at the Local Level: Regulating for
Competition,
Robert W. Poole,
Jr., and Michael Griffin (1994), Shuttle
Vans: The Overlooked Transit Alternative, #176, Reason Public Policy
Institute (www.reason.org).
Jonathan Richmond
(2001), The Private
Provision of Public Transport, Kennedy
Schaller Consulting (www.schallerconsult.com/taxi) provides information on taxi
regulation and policy.
M. Sohail, D.A.C. Maunder and S. Cavill (2006), “Effective Regulation for Sustainable Public Transport in Developing Countries,” Transport Policy, Vol. 13, No. 3 (www.elsevier.com/locate/tranpol), May 2006, pp. 177-190.
Taxi
Study Panel (1999),
A Study of the Taxi Industry in British Columbia, BC Ministry of Transportation and
Highways (www.th.gov.bc.ca);
available at www.th.gov.bc.ca/publications/reports_and_studies/taxi/taxi.htm.
Taxi-L
Website, (www.taxi-l.org) provides links to documents
and links related to taxi transport.
This
Encyclopedia is produced by the Victoria Transport Policy Institute to help
improve understanding of Transportation Demand Management. It is an ongoing
project. Please send us your comments and suggestions for improvement.
Victoria Transport Policy Institute
www.vtpi.org info@vtpi.org
Phone & Fax 250-360-1560
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