Ireland's Shift From Taxi Cartel to Deregulation

From the report about Ireland's taxi industry and the deregulation that took place in 2000, "Economic Review of the Small Public Service Vehicle Industry":

"For more than two decades prior to the year 2000 entry to the taxi market was substantially restricted. While some additional taxi licenses were granted by the licensing authorities, the increase in numbers was curtailed, especially during the 1980s. By the early 1990s, however, this restrictive policy was giving rise to a poor level of service, particularly in the Dublin area, and there was increasing public pressure to grant additional licenses .

Substantial economic growth and a recovery in the national population levels took place during the 1990s, and the supply of taxi services did not keep pace with the demand that arose. This was evidenced by the increasing market value ascribed to taxi licenses, with market values rising from £40,000–£50,000 in the early 1990s to £80,000 towards the end of the decade.

Following a ruling by the High Court, the Minister for the Environment and Local Government introduced regulations in late 2000 which provided that any suitably qualified person could obtain a license. The result was an immediate and full liberalization of entry to the taxi market.

Following these fundamental changes to the market, there was a sharp increase in the number of taxis. By the end of 2001, the number of taxis in the Dublin area had doubled from 2,700 pre-liberalization to 5,500. These trends continued, so that by the end of 2003, the number of taxis in the Dublin area had increased to 8,400. Similar trends were seen in the country as a whole. In 2000, there were a total of 4,200 taxis in the country and this had risen to 16,000 by end 2004."

MP: Deregulation also led to a significant reduction in waiting times for a taxi, from 11.5 minutes in 1997 to 6.2 minutes in 2008, resulting in an estimated value of time savings of more than $400 million annually for Irish consumers. This is a good example of how excessive regulation stifles competition, leading to high prices and poor service, and how deregulation restores competition (often the best "regulator" of all), resulting in lower prices and better service.