The Taxi business is often a much broader representation of an economy - and a city’s culture - than the simple task of driving someone from A to B might suggest. It is always fun and instructive to ask a driver how the local economy is doing; I have often found plenty of insight into local economic conditions by asking a taxi driver how business has been doing recently.
It can be a dangerous business, as recent events have tragically demonstrated. But taxis can be iconic, in a very positive way. London’s Black Cabs and New York’s yellow cars always come to mind. (The classic Black Cab is, in fact, threatened with demise: all things eventually come to an end.) Many other cities around the world have distinctive vehicle colours and styles that are part of the fabric, easily recognisable symbols of a particular place. I have always thought it a shame that Dublin taxis have never managed to achieve the symbolic status of souvenir: all of the tourist shops in New York sell miniature versions of the local yellow cab. Similarly in London and elsewhere. This should be a task for the regulator: make the Dublin taxi a tourist icon. It’s certainly a different way of thinking about regulation. Maybe make them all pink? It would be distinctive, if somewhat controversial.
Regulation has, of course, transformed the Irish taxi industry. It used to be the case, I think, that just about the only rule governing the local industry was that a car had to have four doors. At least that was the story that drivers used to tell. Today there are many more rules and many more taxis.
In New York, you still need a small fortune to buy a taxi licence plate; in London, notwithstanding the advent of satnav aids you still need to do ‘the knowledge’. The price of a NY taxi “Medallion” recently went through the $1m barrier. The list of suspects driving prices higher is a familiar one: the relatively fixed supply of medallions set against a growing economy, a recent hike in (regulated) fares. Less familiar is the idea that the Federal Reserve’s policy of quantitative easing (QE ) is also partly to blame. For those owners who rent out their medallions, there is a reasonably predictable fixed cash return - the rent - that has become much more valuable as interest rates have fallen to historic lows.
Most taxi drivers I have come across are natural entrepreneurs - if slightly frustrated ones. The recent arrival of apps that automate the hailing process are revolutionising the industry. They are certainly making it easier and more secure to call a cab. In the back of a Dublin taxi this week I was told about a variant on the theme of "Hailo". An Irish driver called Derek Manley has self-funded the development of an app that tries to do similar things to Hailo but in a more up-market way. The aim is to provide the same ease of calling a car but with service enhancements including more certainty over the quality of the vehicle that turns up at your door. This is all clearly aimed at business users. The new venture is scheduled to start next week, is called bizcars.ie and, it seems to me, is a local venture that deserves a plug (full disclosure: I have no connection, I just happened to sit in the back of Derek's very comfortable taxi and listened to the sales pitch). Hailo, of course, is a runaway success and represents stiff competition for bizcars.ie, not least in the way it has been funded; it has attracted venture capital backing from both sides of the Atlantic, including cash from one of the firms that originally funded Twitter. A relatively recent round of VC funding for Hailo reportedly raised $30 million.
What messages about the economy can be distilled from taxi-based conversations? It seems that prime Dublin is picking up. Elsewhere, not much is happening. This, of course, is consistent with the high frequency economic data which strongly indicate that the overall economy is flatlining. My suspicion is that some parts of the country are still contracting while Dublin is, in a small way, starting to grow again. This might just be the usual lags (the capital is usually first in and first out of any recession), it might also be the way of the future. Big cities are doing well in lots of countries, at the expense of less populated areas - a long established trend that shows no signs of going away.
