Taxi monopoly

Dayton rulers are up to no good at the airport

By Mark Luedtke

Everybody knows monopolies are bad for consumers, and we’re all consumers. Even leftwing CBS News understands this, but it never hurts to explain it again.

“What’s so bad about a company amassing monopoly power?” CBS asked. “When firms have such power, they charge prices that are higher than can be justified based upon the costs of production, prices that are higher than they would be if the market was more competitive. With higher prices, consumers will demand less quantity, and hence the quantity produced and consumed will be lower than it would be under a more competitive market structure.”

“The bottom line,” CBS continued, “is that when companies have a monopoly, prices are too high, and production is too low. There’s an inefficient allocation of resources.”

Monopolies cost consumers more and make more money for the monopolists. But the problem CBS points out also explains why monopolies can’t exist in a free market. If a company has a monopoly and is overcharging, other entrepreneurs enter the market to obtain a piece of those outsized profits. The competition lowers prices and leads to efficient allocation of resources based on consumer demand.

The only way a monopoly can persist is if it is supported by the power of coercion, and since in modern society government maintains a monopoly on the power of coercion, monopolies can only persist if backed by government coercion.

Dayton’s rulers understand this, so they plan to create a taxi monopoly to serve Dayton International Airport. The original Dayton Daily News article headlined “Dayton Moving Toward Single Provider for Taxi Service” has conveniently been deleted from the DDN website, and my search turned up no similar articles, but WHIO.com remembers: “Three taxi drivers who work at the Dayton International Airport spoke out at tonight’s city commission meeting against the city’s plan to select a single provider of taxi service,” it wrote. “About 11 off-airport taxicab companies are licensed to operate at the airport terminal, but the city has asked for bids for a company to manage and run taxi services.”

WHIO doesn’t use the word “monopoly,” but that’s what a single provider is. Since monopolies are bad for consumers, one might wonder why Dayton’s rulers plan to create a monopoly. It’s obviously a shakedown. The winning bidder will publicly dump money into the city’s coffers and privately line the pockets of the politicians. Not necessarily illegally. Rulers have legalized methods for shaking down businesses to line their own pockets.

The deleted article noted city rulers were open to a cartel of multiple companies, not just one company because multiple companies mean more money for them. But a cartel produces the same negative consequences for consumers. Either way, airport customers can expect to pay higher fares and wait longer for lower quality cabs.

But there’s a twist. “Ride-share services Uber Dayton and Lyft have reached an agreement with Dayton International Airport to allow drivers to wait for trip requests at the airport,” the DDN reported.

By allowing Uber and Lyft to operate at the airport, Dayton’s rulers have reduced the value of the planned taxi monopoly and, therefore, the amount of loot they can collect from it. They must have received something of greater value from Uber and Lyft.

The Uber article offers a hint about why the DDN may have deleted the original article: “But taxi drivers who frequent the Dayton airport have petitioned the city to ban Uber from picking up passengers at the terminal or force them to pay new fees,” it explained. “Taxi companies have said Uber and Lyft are killing business for drivers who can’t keep up with the ride-sharing companies’ low ride rates.”

Dayton’s rulers pushed taxi drivers, and taxi drivers are pushing back. It makes sense the DDN would delete the article to reduce the heat on the rulers it supports and depends on.

Airport Business Manager Sarah Spees provided the hilarious Big Lie of the article: “I can’t tell someone how to run their businesses,” she says. “I think the intent of everything is to develop fair opportunities for all businesses, and to deliver the best customer service options and transportation options that we can to all of our passengers.”

As if banning some taxi companies from the airport and creating a monopoly is a fair opportunity for the excluded businesses. In a healthy society—one not ruled by coercion—Dayton’s rulers would be considered crooks. At least they’re entertaining.

 

The views and opinions expressed in Conspiracy Theorist are the views and/or opinions of the author and do not reflect the views and/or opinions of the Dayton City Paper or Dayton City Media and are published strictly for entertainment purposes.

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Mark Luedtke
Reach DCP freelance writer Mark Luedtke at MarkLuedtke@DaytonCityPaper.com.

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