Cab Innovation at Horse-and-Buggy Pace

Cab Innovation at Horse-and-Buggy Pace

"In Pennsylvania, the effect of regulation is to afford existing cab companies a sheltered environment wherein innovation and, frankly, customer service are secondary to maintaining market share in a static environment". The Allegheny Institute wrote that in 2001 in a report analyzing the demand for taxicabs in Pittsburgh.

Back in those days many restaurant owners were complaining about the difficulty in securing cabs for their patrons, noting that the dominant carrier preferred servicing the route between Downtown and the airport instead of running shorter routes. One restaurant owner even launched his own cab service, only to be challenged in court by the dominant carrier. That’s what happens when the regulatory framework requires competitors to prove that there is a need going unmet by the incumbent and administrators decide if their argument has validity.

More than a decade later the City is ready to see its largest incumbent carrier make an announcement that it will offer short taxi trips and that patrons will be able to hail a cab rather than waiting at a stand or calling for service.

What makes the announcement all the more ironic is where the announcement is being made-Market Square. The Square has been renovated and "has seen a proliferation of new restaurants" according to a newspaper report. Imagine if each new restaurant that wanted to open up in the Square had to follow the procedure that new cab companies have to. Someone wanting to open up a deli, or hamburger restaurant, or seafood place would have to have their approval vetted by the incumbent restaurants who would be able to make a case that they too could make what the new restaurants wanted or that lunchtime customers really don’t need more choices. Silly when you think of it that way, isn’t it?