Sunday, May 3, 2009

Help make Nashville more efficient

Taxi demand has fallen dramatically in Nashville. The most reliable source of demand is from travelers arriving on planes and drivers will wait 3-4 hours at the airport for a fare. There are five taxicab companies in Nashville, and each company is allowed to have five cabs in the airport queue. So when one of their taxis picks up a fare, the dispatcher sends another company cab to the airport to get into the queue.

So here's a simple policy proposal to reduce the what economists call the "deadweight loss" of waiting in the taxi queue (because no one benefits from this kind of competition). Have each company take turns dispatching cabs from the airport. If a single company had control of the queue, they would not want their drivers waiting four hours for a fare. Instead the drivers would be sent to higher valued uses, costs would be reduced, and perhaps fares would come down.

If you think that this is a good solution, help our city become more efficient. Call Brian McQuistion, Commission Director, and ask him to make the change.
(615) 862-6777 FAX Line(615) 862-6765

Also, if you can think of problems with this proposal, post a comment.

UPDATE: I called the taxi commission and they insisted it was an airport problem; called the aiport, and no one would answer.

2 comments:

  1. If I understand correctly, the cabs would rotate "airport duty" for a given period.

    Conflict would arise if the periods of heterogeneous - e.g. 8am busier than 9am, Mondays busier than Tuesdays, August busier than November etc. Determining the rotation is problematic.

    Second, cab companies often do not own the cabs. Thus, there is agency problem - the dispatcher only cares that a cab is there for a customer not how long the owner/driver has to wait for a fare.

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