Another patch was sewn on to the ragged fabric of Dublin's transport infrastructure this week with the recommendation from the Local Authority Taxi Committee that another 830 taxi licences be issued over the next three years, with the first 300 issued as soon as possible. The new licences, costing between £14,000 and £18,000, would be additional to the batch of 300 licences already promised for 1998. The committee's proposal - if ratified by the Corporation and by the area's three county councils - offers at least the prospect of better times ahead for the people who will stand stoically in lengthy city-centre taxi queues during the busy nights between now and Christmas. But it still falls well short of a solution to Dublin's chronic taxi shortage.
As the former taoiseach Garret FitzGerald estimated recently in these pages, an increase in taxi numbers at the rate now being suggested would enable supply to meet demand only if continued until about 2010. Sadly, if predictably, the committee does not seem prepared to tackle the root causes of the taxi shortage: the artificial restriction on entry to the business and the system by which licences are issued, and later traded, at excessive prices.
The Dublin taxi business - like the retail drinks trade - is a classic example of a controlled market in which politically imposed restrictions have led to the growth of powerful vested interests, which in turn inhibit political attempts at reform. The licensing system artificially limits the supply of taxis, raising the financial return from taxi ownership and giving licences an inflated value. Becoming a taxi-owner is expensive - licences have been sold in recent times for sums of up to £80,000 - and some operators have borrowed heavily, re-mortgaged their homes or invested redundancy payments to get on the road. This level of investment in turn leads to excessive fares and strengthens the desire of those already in the business to keep others out.
In many European cities, by contrast, licensing - at modest fees - is used to maintain vehicle and driver standards, but not to control supply, with the result that taxis are both plentiful and cheap enough to be a realistic competitor to both public transport and private cars. The case for liberalising the Dublin taxi trade on similar lines is unanswerable in terms of the common good - and it would surely be possible to devise a suitable system for off-setting losses incurred by existing taxi-owners. One suggestion, for example, is that all current licence-holders should be given an additional licence, which they could either use or sell, pending complete deregulation of the market in a few years.
The radical overhaul of the taxi market suggested last June by the Faber report, commissioned by the Corporation, raised hopes that thoroughgoing reform was in sight. However, the latest recommendations from the Local Authority Taxi Committee seem more closely to resemble the modest proposals issued in September by the Dublin Taxi Forum, which strongly urged that entry to the market, as well as fares, should continue to be regulated. Is it too much to hope that this week's proposals mark a significant step on the road to a free market for taxis - rather than a sign that politicians are once again being tempted to give a lift to vested interests while the public wait by the roadside?