Communist cabs: Connecticut, US versus Cuba

Want to catch a cab in Havana? Good luck. Long-time Cuban dictator Fidel Castro had a particular hatred for private taxis and their drivers, whom he accused of seeking "juicy profits" and fomenting a black market by buying up the state-subsidised gasoline that his country "had sweated and bled" to obtain.

  • No new taxi licences have been issued since October 1999, fees are set by the state, and licence renewal fees are high.

  • But in January, Cuba took a surprising step and announced that it was going to loosen up the rules, even going so far as to let taxis set their own rates in the city.

    Rates are still capped, and the number of licences will be determined by local officials, but it's a pretty big step for Cuba, where nearly all aspects of commercial life are state-controlled, says Reason. The decision is a small sign that the new president, Raul Castro, may be relaxing his brother Fidel's communist policies.

    Unfortunately, capitalism isn't yet on the march for Connecticut taxi drivers, says Reason:

  • A few large companies dominate the market in the state, and independent taxi drivers are routinely denied licences after a long wait.

  • More than half are rejected in part because they were unable to prove their business was necessary.

    "Imagine if we required a restaurant to prove that a town didn't have too many restaurants before they were allowed to open a new one," said Robert McNamara from the Institute for Justice.

    Last month, Connecticut drivers rallied in Hartford to get the state laws changed. There's one advantage they have on their Cuban brethren – if you tried a stunt like that in Cuba, you'd probably wake up in prison, says Reason.

    Source: Katherine Mangu-Ward, Communist Cabs: Connecticut vs. Cuba, Reason, May 2009.

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    For more on Regulatory Issues:

    FMF Policy Bulletin/ 14 April 2009

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