Driven to regulation madness

IF BOSTON regulated baked goods the way it regulates taxicabs, fewer families would eat fresh bread, and those that did would pay a premium for the privilege.

If bakeries were treated like taxis, their number would be severely limited, no matter how great the consumer demand. No one would be allowed to operate a bakeshop without a "medallion" from the Police Department, and since the supply of medallions would be kept artificially low, their price would shoot sky-high - to $150,000, $200,000, maybe more. For most entrepreneurs, simply getting permission to earn a living as a baker would mean going deeply into debt to buy a medallion. Or paying through the nose to lease one from someone else.

Even after opening a shop, bakers would remain firmly under the thumb of the Police Department. The police would decide what customers they could sell to; the police would dictate the prices they could charge. A thick sheaf of police-issued regulations would govern every detail of the baker's workday - from the make and model of his oven to the wording on his receipts.

In such an unnatural economic environment, many bakers would find themselves forced to work long hours for low pay, with no vacation or benefits. Consumers would be worse off, too. There would be fewer vendors selling baked goods; in many neighborhoods there would be none at all. Prices would be uniformly high regardless of quality; as a consequence, service would often be mediocre. And the longer such steep entry and price regulations persisted, the more the public would view them as normal, and assume that a free market in baked goods was simply impractical.

Boston's mayor and police commissioner announced a "comprehensive" overhaul of taxi industry regulations recently, declaring that the changes "will significantly enhance our local taxi service and provide a more customer-friendly experience." What they will really do is impose a slew of new requirements on top of the old ones, make Boston cab fares among the nation's highest, and put an untold number of cabdrivers out of business.

Under the new rules, a taxi ride in Boston will now cost $5 for the first mile and $2.80 a mile after that. Drivers are banned from wearing T-shirts or using cellphones. Cabs must be equipped with credit card machines and washed every day.

Particularly onerous is a decree that existing taxicabs be replaced with hybrids, with the entire fleet to be converted by 2015. This, says the mayor, is "essential" to "improving air quality" in Boston. Actually, Boston's air quality is fine. What is not fine is the economic pain the new mandate imposes on small owner-operators, most of whom drive Crown Vics that can be bought used for around $6,000. A new Prius or Camry hybrid, by contrast, costs more than four times as much, and is often available only after a months-long wait.

Are the new regulations sensible? Well, some passengers will welcome the convenience of credit card scanners or the silencing of drivers' cellphones. With gasoline above $3.50 a gallon, higher meter rates will undoubtedly help cash-strapped cabdrivers. On the other hand, higher fares will make taxi service even less affordable for many residents, while the hybrid mandate will make it harder than ever for many drivers to climb above the first rung on the ladder to success. Daily carwashes may appeal to those who find dirty cabs an intolerable eyesore; others may be appalled by the waste of so much water and energy.

What we should really be asking is not whether the rules make sense, but why the Police Department should be telling the taxi industry how to operate in the first place. Government regulators don't set the price of bagels or steak knives or laptops; why should they prescribe the price of a ride from Logan Airport to Beacon Hill? Bureaucrats don't decide how many shoe stores or law offices or pharmacies the city needs; why should they dictate the number of taxicabs?

Our Soviet-style regulation of the taxicab business is indefensible, and layering new regulations over old ones is not an improvement. What taxi owners, drivers, and passengers need is less micromanagement, not more. Unleash the taxi market and we would see more cabs serving more neighborhoods, with better service and lower fares. Economic freedom works beautifully for bakers and their customers. It would work just as well for cabbies and theirs.

Jeff Jacoby can be reached at jacoby@globe.com.