Rent-Seeking In Omaha and Lincoln NE
|October 17, 2012||Posted by Progress Report under Economic Principles|
by John K. Ross
In August, Nebraska’s Public Service Commission (PSC) denied Servant Cabs’ application to operate in Omaha, which is now served by a monopoly of five taxi companies under common management, and the rest of the state.
Hotel managers speak of shoddy service: long wait times, cabs that never arrive, dirty vehicles and a shortage of taxis during periods of high demand such as bar closing hours or large events (like the College World Series, which takes place in Omaha each June). One stated that after hour-plus waits, many bar patrons give up and drive home under the influence.
Disabled residents described the drastic need for more wheelchair-accessible transportation options, which Servant would have provided. Currently, disabled residents who need to travel during hours or along routes not covered by public transportation call ambulances because of the scarcity of cabs that can handle wheelchairs.
Even some Omaha cab drivers, who complained of poor treatment by existing companies, testified for Servant Cab, saying more competition would benefit consumers and cabbies.
OTOH, commissioners cited complaints from Lincoln residents and officials about Servant Cabs’ failure to meet customer demand in Lincoln — complaints that look very similar to some of those aired by Omaha residents about a shortage of cabs in Omaha. To PSC commissioners, a monopoly’s failure to serve Lincoln customers justifies protecting a monopoly in Omaha.
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