More on those illegal taxis

Recently I wrote about the illegal taxis operating in Dubai. Illegal taxis operate in many big cities in New York, Seoul and Buenos Aires. At Dulles airport outside Washington you are warned not to take rides from people who approach you.

Back in 1997 John Tierney wrote a very nice piece for NYT Magazine on illegal taxi vans operating in New York (Times Select). Here are few extracts:

Vincent Cummins looks out from his van with the wary eyes of a hardened criminal. It is quiet this evening in downtown Brooklyn . . . too quiet.
...
He looks left and right. No police cars in sight. None of the usual unmarked cars, either. Cummins pauses for a second -- he has heard on the C.B. that cops have just busted two other drivers -- but he can't stop himself.
...
Five seconds later, evil triumphs. A middle-aged woman with a shopping bag climbs into the van . . . and Cummins drives off with impunity! His new victim and the other passengers laugh when asked why they're riding this illegal jitney. What fool would pay $1.50 to stand on the bus or subway when you're guaranteed a seat here for $1? Unlike bus drivers, the van drivers make change and accept bills, and the vans run more frequently at every hour of the day. ''It takes me an hour to get home if I use the bus,'' explains Cynthia Peters, a nurse born in Trinidad. ''When I'm working late, it's very scary waiting in the dark for the bus and then walking the three blocks home. With Vincent's van, I get home in less than half an hour. He takes me right to the door and waits until I get inside.''

Some of Tierney's analysis

The van drivers have refuted two modern urban myths: that mass transit must lose money and that it must be a public enterprise. Entrepreneurs like Cummins are thriving today in other cities -- Seoul and Buenos Aires rely entirely on private, profitable bus companies -- and they once made New York the world leader in mass transit. The first horsecars and elevated trains were developed here by private companies. The first subway was partly financed with a loan from the city, but it was otherwise a private operation, built and run quite profitably with the fare set at a nickel -- the equivalent of less than a dollar today.

The whole article is worth reading. It's reprinted in Mankiw's Principles of Economics 4e (look in right column under self promotion).

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