Ian Harper’s Competition Policy Review has set a big agenda for the next, long-overdue wave of micro-economic reform in Australia, with recommendations calling for substantial deregulation of retail trading hours, pharmacies, liquor sales, imports of books and second-hand cars, and taxis, among other things. With Professor Harper’s final report having been released yesterday, it is timely that Queensland Young Economists have an upcoming Coffee Connections event on Thursday 9 April on taxi regulation and Uber.

My former colleague Brad Rogers has previously commented on the adverse impacts of restrictions on taxi licences from consumer welfare and public safety perspectives:

Queensland taxi licences and drunken violence

As Brad has noted, there would be large gains to consumers through freeing up the taxi industry, as the current supply restrictions mean higher prices for consumers. The Harper review cites a NSW IPART finding that 15 to 20 per cent of NSW taxi fares are attributable to the supply restriction. That is, a $20 cab fare is up to $4 higher than it would be if supply weren’t restricted.

I expect Uber will promote long-overdue reform of taxi regulation, as the service has shown the clear benefits to consumers of additional competition, and it would be highly desirable to get Uber out of the legal grey area it is currently in.

Update: I’ve revised this post since it was first put up this morning to reflect the fact that Brad Rogers will not be attending the coffee event in an official capacity. Any views of Brad’s that I’ve referred to in this post are not to be necessarily attributed to Brad’s current employer or past employers.