[rg]

"If anyone could drive a cab, the profession might only barely pay a living wage, ..."

That isn't the case in London, widely thought to have the best taxi service in the world. There, anyone can pass a demanding standard examination and having done so can drive a cab. Anyone can build a vehicle that meets a standard inspection, and once passed that vehicle can be used as a cab. No limit on the number of drivers, no limit on the number of taxis, both inspected but not limited. The result is that different drivers work different convenient hours, some full time and some part time, with larger numbers of cabs available at rush hours and other times of heavy demand. All the drivers know how to drive well, all the taxis are clean and in perfect shape, and there's always one available when you need it. This is what makes it truly possible to live better in central London without a car than with one.

All the schemes to forbid more competitors simply hand profits to taxi operators and produce poor service for taxi users. As usual, government regulations are captured by the regulated industry to exclude competitors.

[gruseom]

a demanding standard examination

This test is legendary. There was an interesting study done on the brains of the drivers who pass it:

http://blogs.discovermagazine.com/notrocketscience/2011/12/0...

[andyjsong]

I wonder if GPS has downplayed the role of having to memorize the streets of London.

[crazygringo]

That's actually very interesting, I was unaware of that.

I wonder if the very difficult examination serves to act as a natural limit on the number of taxis?

Because my question is, what is the supply-and-demand reason that there are only 21,000 cabs in London, instead of, say, 50,000 or 200,000?

[nchuhoai]

Isn't that just natural supply and demand at work? You will get the equilibrium when the price of the cab fare is equal to the real cost of it. There are not 50k cabs, because there are just so many guests that want a cab. Or do I misunderstood you?