Hailing a cab in Paris has become quite difficult in recent years, thanks to the alliance between the union and central planners. Paris caps the number of taxi licenses it awards and charges 230,000 Euros for each one. As a result, they are expensive and in short supply. Their drivers also have a reputation for poor service, which shouldn’t come as a surprise given the monopoly they enjoy.
Companies like SnapCar and VTC have moved into offer an alternative, Tourist Vehicles with Chauffeurs (VTCs in French). Unlike taxis, VTCs offer transportation by prior arrangement. Rather than wait for a taxi, patrons can use their smartphones to contact a VTC. They typically get a response in just a few minutes, which can beat the long wait for a taxi.
But unionized taxi drivers in Paris did not appreciate the competition. Rather than try to outperform the VTCs, they’ve lobbied for a mandated 2-hour delay before VTCs can respond to any requests. The French government “compromised” and agreed to a 15-minute delay. This means that VTCs must lower their service levels to the level of mediocrity offered by the taxis. Consumers have no choice in the matter.
This is French cronyism at its finest. Unions and government have colluded to restrict choices and deliver poor service to the public, all in the so-called national interest. Perhaps you are convinced that this type of thing doesn’t go on in the US. Think again.
Although cronyism in the US is often more subtle, examples are not difficult to find if you look for them. Public schools are funded by tax dollars, forcing Americans to pay dearly for a “free” education, and then pay again if they choose to send their kids to a private school. The federal government spent billions to prop up General Motors after consumers were not willing to purchase enough GM vehicles on their own. The City of Orlando just committed $30 million of tax dollars for a new soccer stadium to “boost the economy.”
In each of these examples, politicians committed tax revenues—future tax revenues in the case of the federal government—to pursue what liberals call the public good. In each instance, however, they distort markets by redistributing private wealth in ways individuals would not otherwise do on their own. If soccer fans in Orlando really wanted a new stadium, the city wouldn’t need to subsidize ticket prices by picking up part of the construction tab. If they don’t want it bad enough to pay the entire cost, then everyone else shouldn’t be required to pick up the tab.
Many Americans fail to see the link between the French taxi fiasco and incessant government activity in the US. Those who do make the connection seem unwilling to oppose this cronyism lest they be labeled as opponents of education, American cars, or economic development. The rest of us have grown tired of politicians who insist on raising taxes and hiking the debt to fund these types of projects. We are looking for new leadership.