Research On Entering Regulation Of The Taxi Industry

As a compliment to the large-scale urban public transport system, taxicabs play animportant role in facilitating urban residents’ commuter. It has always been controversialon whether and how we should impose regulation on taxicab industry. Some argue thatthe market force could guarantee the perfect competition in the industry, which indicatethat the government interferences are non-essential. In contrast, some others suggest thatvarious factors, notably the cruising nature of the taxicab market, make the industrysuffer the market failure. To this end, in purpose of ensuring the healthy development ofthe taxicab market, it is necessary to make economic regulation to the industry.This paper is based on general theories of government economic regulation and thefeatures of taxicab industry. The paper firstly focus on the theoretical foundation of theentrance regulation, and then identify the necessity of entrance regulation to the taxicabindustry. The regulation includes quantity regulation and operating regulation. Theimplementation of entrance regulation could make up for the shortcomings of theindustry by mitigating the negative externality and improving service quality and safety.This paper focus on the taxicab industry in the city of Shenyang, and identify threelong-term outstanding problems. They are taxicab companies’ monopoly on operatinglicenses, taxi drivers’ relatively low revenues and the poor quality of services. All ofthese problems could be attributed to the existing government regulation policies.To discover the real resource of problems haunting Shenyang taxicab industry, thispaper conducts analysis on the existing quantity regulation and operating regulationpolicies. By establishing the BP neural networks model of the number of taxicabs inShenyang and comparing the number with that of other cities, the conclusion is drawn asthat the number of taxicab in Shenyang is not left behind by the rapid development of thecity. Therefore, the problems mentioned above are not caused by the insufficient supplyin the market.Having ruling out the possibility of quantity regulation causing the problems, thispaper continue to focus on the existing operating regulation policies. After thecomparison of three main domestic taxicab operation modes, it is found that the existingtaxicab operation mode in Shenyang is the resource of problems. In the end, this paper provides some suggestions on how to improve the operation regulations to Shenyangtaxicab industry.