The Monti administration says there are too many taxis, evident in the long lines of white cars on city streets that wait an average of 90 minutes before getting a customer – because rates are too high. If the number of licenses was increased, there would be more competition and fares would have to drop, increasing demand, the administration argues.
The senate approved a watered-down version of the proposal last week and it is now being discussed in the lower house. Major political parties, including Mr. Berlusconi’s center-right party, contested the effort by introducing more than 1,700 amendments. The economic measures are popular with the public, with 58 percent of Italians supporting them, according to a survey published by newspaper Corriere della Sera. But within the tightly regulated taxi industry the reduction of barriers to entry is considered catastrophic.
Each city council sets the number of local taxi licenses, which only individuals can own. National laws stipulate that licenses must be obtained through either a public auction or from a cab driver willing to transfer his license. The price ranges from €50,000 ($62,280) in small cities like Bari to €300,000 ($403,650) in Florence.
Giovanni Maggiolo, president of the national UN.I.CA Taxi Filt/CGIL union and a cab driver in Milan, said that while city councils set the original price of a license, also known as a medallion, supply and demand determine its resale value.
To buy a license, many drivers go into debt, often mortgaging their home or their parents’ property, explains Pier Giovanni Bestente, president of the Radio Taxi 5370 cooperative, which represents 750 of Turin’s 1,600 cab drivers.
“Adding new taxi licenses would ruin us,” Mr. Bestente says. “It would further reduce the low amount of work we have while depreciating the value of the license.”