Theory of Regulatory Cab-ture

George Stigler is entitled to laugh from the grave, as London's transportation professionals joust over who should get to drive in bus lanes;

My cabbie didn't seem concerned about losing his primacy on the roads anytime soon, however. Pulling up to the Add Lee [car hire] offices, just in time, he jerked his chin towards the entrance: "They may have a lobby, this mob taking over. But so have we."

What does the Add Lee CEO think?

Mr. Griffin says he'd be just as happy to see the Court of Appeals kick black cabs out of the bus lanes—similar to New York, where yellow cabs do not enjoy the privilege of running up reserved bus lanes to skirt traffic—as he would be to see private-car services allowed in.

"To us, it's a logical argument," he adds. "If you try to define what is a taxi and what is a private hire, what functions we carry out—you'd think, to a layman on the street, they'd be the same product. Therefore how is it not anticompetitive to favor one over the other?"

As the author of the piece (Anne Jolis) points out, it's been anti-competitive since King Charles I in 1635.  Back then it was the water-taxi men with their lobby getting the privileged monopoly, but political fashions were different and eventually;

 In 1637 he [Charles] proclaimed that just a few hired coaches were so "very requisite for our Nobility" that "there should be a small competent number allowed for such uses." He followed up shortly with Royal preferences on horse specs and buggy make. After the Interregnum, Charles II issued more licenses, and licensing fees and standards, with preference to "ancient Coachmen or such Coachmen as have suffered for their service and affections to" the King or his late father.

London cab fares have since been fixed by Act of Parliament and price competition is banned.  

Tradition being so important in England, that even the CEO of Add Lee wants to keep to some form of it;

But don't expect Add Lee to start lobbying for fully equal road-rights—namely, for private-hire vehicles to be legally flagged down on the street like regular taxis.

"I actually think the London regime is a great balance," says Mr. Griffin, citing the superiority of the Knowledge [exam for cab drivers] over sat-nav, and stressing that Add Lee is as concerned as anyone with "absolutely prevalent" illegal touting. "Plying for hire is something that should be the preserve of the black taxi."

Londoners who have stood in the rain without an available cab in sight might disagree. But if regulators ever did eliminate the cabbies' plying-for-hire monopoly, Mr. Griffin explains, Add Lee would also "effectively lose control."

Giving licensed private-hire drivers the same plying rights as cabbies would not only mean more choice for customers—it would cut out the legal need for middlemen like Addison Lee.

"From a business point of view," Mr. Griffin politely concludes, "we'd like to keep control." 

What's good for Add Lee is good for the country?