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The Regulation of Taxi and Limousine Industries in Pennsylvania: Creating a Regime that Encourages Competition, Enables Innovation, and Protects Consumers

After being requested by the Pennsylvania Public Utility Commission (the Commission) to offer input on the regulations governing the taxi and limousine industries, The Project for the Study of American Capitalism at the Mercatus Center developed this report to assist the Commission as it explores these issues. As the title suggests, the report seeks to provide a policy framework for evaluating why, when, and how to regulate these increasingly innovative and changing industries. It provides more detail—including a case study—on the anticompetitive effects of certain regulation in today’s for-hire transportation market. The research also suggests that taxi regulators should focus on removing barriers to entry, price controls, and mandated business practices.

The report argues that there should be no barriers to entry at the firm, vehicle, or driver levels; there should be no price controls; and there should be no exhaustive rules governing business operations or service provision. By limiting competition, these types of regulations have yielded higher prices, lower quality, and antiquated technologies and practices. By removing these barriers, the Commission can arrest the precipitous decline of the taxi and limousine industries in the face of changing technologies and ensure that the industries’ future is characterized by continued competition and innovation.

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