Rank protectionism

ALONG with red letterboxes and telephone booths, London’s black taxis are touted as symbolic of the city. Fully 25,600 drivers trundle around the capital’s streets. They are privileged: unlike minicabs, they can pick up passengers hailing in the street and run on a pricey meter system rather than a fixed fee. Nationally the average fare is £5.77 ($9.56) for two miles; in London it is £7.20. All cabbies are required to pass the “knowledge”, a test of all the roads within a six-mile radius of central London. If they take a daft route to their destination it is usually deliberate.

But becoming a taxi driver is ever harder. In the 1970s the

knowledge took around 23 months to complete. Last year it took 50 months. “You can get a PhD in the same time,” complains Malcolm Paice of CityFleet, a radio-taxi firm. Between 2009 and 2012 the number of taxi drivers increased by only 4% in London. Faced with such a high barrier to entry, more people are taking a shorter course that only allows them to drive black cabs in suburban areas, says Tom Moody of Transport for London (TfL).

But in the same period the number of minicab drivers in London jumped by 19%, to 67,000. The scorn they receive from black-taxi drivers is little deserved. Liam Griffin, the boss of Addison Lee, a large minicab firm, says minicabs have become more comparable to black cabs since 2004, when regulations and criminal-record checks were introduced. All of the company’s drivers take a six-week course and rely on satellite navigation systems—as do some black-taxi drivers. Their fares are around a third cheaper, Mr Griffin says.

Technology is further bulldozing the distinction between black taxis and minicabs. Fully 14,000 London taxis have signed up with Hailo, an app for ordering cabs that was introduced to London in 2011. Ron Zeghibe, Hailo’s chairman, says that some drivers shun taxi ranks or “street work” in favour of punters who order through his service. Minicab companies have their own, similar, apps. One, from Greentomatocars, helped the firm nearly double in revenue in a year.

Yet the separation between the two kinds of taxis looks likely to stay. In April the Law Commission, an independent body, will release a report on the taxi trade. Many of its recommendations will boost minicabs outside London. Larger firms such as Addison Lee will find it easier to expand as licensing rules are simplified. But London’s black cabs look likely to be protected. They will still be regulated by TfL; barriers to entry will remain high. Instead of nurturing a dwindling trade, this could have the opposite effect. Black cabs might soon become as quaintly archaic as telephone booths.

source; The Economist.