The Study On Government Regulation Of Taxi Industry Under The Internet + Background

Negative externality and asymmetric information are the main features of market malfunction, which means government regulation is necessary to regulate the market malfunction and increase social welfare. However, government regulation failure is always occurred because of rigid rules, inadequate implementation, self-interested interest groups and changing market activities. The development of Internet is leading to efficient information exchange and distribution of production factors, low transaction costs and high productivity. What’s more, Internet+means the prospect about the new normal of economic-social development by promoting integration between economic-social fields and internet, pushing technological progress and organizational change. Hence, government regulation is encountering unprecedented crisis and the challenge of deregulation and deepening reform.Traditional government regulation in taxicab industry includes entry, quantity, price, safety and service. Currently, with the development of internet-hire-vehicle under the background of internet+, the entry control system is broken, the imbalance between supply and demand is changed, and meanwhile it is possible to adjust rates dynamically and to implement informational supervision afterwards. Hence, Internet-hire-vehicle has enormous impact on traditional cruising taxicab industry. The case study of government regulation reform of Hangzhou taxicab industry shows two changes. On the one hand, deregulating quantity and price control to adjust to the interest relation and encouraging the usage of internet technology to upgrade the industry; On the other hand, exploring specific regulation policy of internet-hire-vehicle and taking platform as a main way to put internet-hire-vehicle into regulation framework. Specifically speaking, the relationship between government and platform is equal to principal-agent relationship, which means platform acts as the agent by regulating internet-hire-vehicle directly with price policy tools, and the government serves as the principal to takes the responsibility to incentive regulated objects with reasonable rules.Nevertheless, there are still some challenges in current government deregulation reform, for example, the contradiction between decision-making rights localization and administrative systems standardization as well as regulation in deregulation, prohibiting illegal operation and encouraging innovation. Therefore, how to regulate appropriately is becoming a roadblock in the process of deregulation. The exploration of balancing economic performance and regulation, efficiency and safety in taxicab industry is still worthy of an intensive study.