Taxi Wars in South Africa

Moneybox
A blog about business and economics.
Feb. 1 2012 8:00 AM

Taxi Wars in South Africa

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South African minibus cab.

Wikimedia Commons

I am a proponent of vigorous competition in general and am of the mind that the taxi cab industry in the United States suffers from too little of it, but this story out of South Africa where rival cab associations shoot it out in the streets is a reminder that socially functional capitalist competition is a particular kind of thing:

Large numbers of police were sent to parts of Hendrik Potgieter Road in Ruimsig on Tuesday night to prevent another shootout between two rival taxi associations. On Tuesday, a taxi owner from the Dobsonville, Roodepoort, Leratong and Joburg Taxi Association (Dorljota) was gunned down in a drive-by shooting on the corner of Hendrik Potgieter and Peter roads in Ruimsig.
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This is, of course, also how the mafia competes. And as a friend observed in conversation the other night, if Mexican drug trafficking organizations were actual cartels then they wouldn't give the world nearly as many problems. At our best what we do is create systems of law and norms such that firms compete to deliver quality products at appealing prices, without resorting to the competition-by-violence method that seems to kick in where quality governance is absent.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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