Taxi monopoly and airfare favoritism means rising costs for Canadians
San Francisco, CA -- (SBWIRE) -- 01/07/2013 -- Anyone wondering why cost for visiting family has risen for the recent holiday season, the answer can be found quite simply by looking at one's own government.
A trip for the average Canadian family involves needing to load into a cab, drive to the airport, wherein the that cost alone can be pricey. Cities across Canada limit the number of cabs that can operate, and over the last two decades, many cities have scarcely increased the number of taxi licenses. The result is the market for rides have grown, while the supply of carriages has remained steadily flat.
While that bodes well for a taxi company, it is not great news for travelers who have to pay inflated cab fares. Nor is it great for the people who seek employment as cab drivers, including the many newly settled Canadians trying to find work.
Employment as a cab driver is one that only sees a small chunk of fare, due primarily to the employment of entrepreneurial options that are held hostage by the monopolistic quality of companies within the cities.
Canada's current approach is in contrast to that that was seen in 2007 OECD report wherein the increasing number of OECD countries removed or well-loosened supply restrictions on taxis operating within the cities. The OECD noted the reform resulted in a strong positive and saw observable benefits, including “reduced waiting times, increased consumer satisfaction and, in many cases, falling prices.”
The taxi situation is just one of the examples of consumers facing higher travel costs throughout the traveling season.
After one pays a high price for the ride to the airport, one is also faced with high ticket prices, inflated by the federal governments favoring of “domestic airline” favoritism, which restricts competition to boost air travel costs.
The Canadian Government set policy that foreign airlines cannot pick up or drop off passengers solely within Canada. That ability is designated only for domestic airlines.
Such Canadian restrictions are a distinct contracts to those of Europe. French airlines are not restricted to just France, nor are German airlines held to only Germany.
The result is that “Prices have fallen dramatically, in particular on the most popular routes,” notes the European Commission-Mobility and Transport, the agency tasked with overseeing transportation in the European Union.
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