What is WRONG with ‘illegal taxis’? The Dubai Road and Transport Authority (RTA) has been insisting on car poolers jumping through hoops of fire whilst visibly chewing on photocopies of their grandparents buttocks so that they can stop the societal evil of illegal taxis. But the very reason for a market developing in illegal taxis is that there is a clear and unfulfilled market need. Whatever happened to ‘laissez-faire’ – the attitude that built Dubai?
Nobody sensible would take an illegal taxi in a market where there were well-regulated legal taxis that offered a prompt, clean, efficient and pleasant service at a reasonable price. But if someone wants money for a ride and I'm willing to pay it and be outside the regulated environment, then that's my lookout – my risk and my choice to make. The better the ‘regulated’ taxis, the less likely I am to go ‘unregulated’.
If the regulated taxis were a bunch of irresponsible, rude, self-serving bahoos that won't pick up fares, won't travel to a range of places, won't abide by the regulations, don't know their way around and generally try and fleece all and sundry, then I'd be very tempted to do the unregulated thing. Particularly when trying to travel in difficult traffic in what must be growing into one of the world’s most hellish rush hours – an experience unrelieved by the existence of any viable public transport. Particularly cross-Emirate public transport. Because if there were a cost effective viable public transport option, punters would surely be taking that rather than an unofficial taxi! No?
So the very market for unregulated (‘illegal’) taxis is created by the inefficiencies of the regulated (‘legal’) market. If there’s a market in illegal taxis, it’s surely a clear sign of failure on the part of the RTA, isn’t it? Or have I got this all wrong because I’m not a ‘traffic expert’?
Informal markets exist when formal markets fail. And most formal markets start as informal ones. It’s called innovation!
Using regulation to stifle market innovation is something that we've seen before (Skype), but it don't make it any the less ugly...