The liberalisation of taxi policy: Capture and recapture?

This paper analyses the decision-making processes behind the reform of a policy that had caused significant controversy for over a decade. At 8 p.m. on 21 November 2000 the Minister of State for the Environment, Bobby Molloy, TD, signed S.I. No. 367/2000 – Road Traffic (Public Service Vehicles) (Amendment) (No. 3) into law. This statutory instrument provided ‘for the full resumption of taxi licensing’ and ‘the revocation of regulatory provisions involving quantitative restrictions on the licensing of taxis and hackneys’. With the stroke of a pen, Molloy had effectively ended the taxi licensees’ de facto 21-year control of public service vehicle licensing policy. The paper finds Molloy’s decision to have been a significant policy improvement as it brought about a substantially better taxi service. In addition, the paper shows that even with strong evidence of policy failure, its reform can take a considerable time. With regard to the four-factor framework of institutions, ideology, interests and irrationality, I find that the institutions of the state, while initially facilitating the regulatory capture of the policy by the taxi sector, eventually ensured that this was broken down due to the electoral system and the separation of powers. Up until the reform decision, the interests of the taxi licensees and their political supporters eclipsed the common good. Ideology played a significant role as a backdrop to the policy but ideology was not the primary reason the minister deregulated. Finally, I find that the collective irrationality of the taxi sector leads to an overestimation of their power due to an inability to process the relevant information and collectively agree a reasonable compromise. The key recommendations of the paper are that the means of policy setting should be radically and innovatively overhauled, and that it is imperative that regulators harness the vast information that taxi apps gather in order to improve regulatory outcomes.