Common Tragedies

Thoughts on Environmental Economics

Hybrid taxis

Posted by Evan Herrnstadt on September 26, 2007

Chris Peloso at Metroblogging DC notes that a new company offering hybrid cab service has sprung up in Arlington. However, these aren’t taking the place of other, less efficient cabs:

The weird thing is that since they aren’t taking any of the regular taxis off the street, instead of having 600 inefficient cabs, we now have 600 inefficient cabs plus 85 efficient ones. Doesn’t seem like it is going to reduce emissions to have more cabs on the street, especially since all those extra cabs will just be idling in front of hotels or the airport waiting to pick up a fare.

Good point. We could hope that people would exercise a preference for this new transport option, thus eventually creating incentives to retire less efficient cabs. However, think about the common circumstances in which one hails a cab:

(1) I’m in a hurry to get to a meeting.

(2) I just left a bar, and it’s too late/I’m too drunk to wait for a bus or train.

(3) I have planned this trip well, and thus I have lots of time to kill.

In my experience (1) and (2) are a lot more common than (3). Seems to me that in these situations, dirty cabs and clean cabs become near-perfect substitutes, assuming prices are the same:

Currently all the local taxicabs are charging a premium because fuel prices are so high. Since these hybrids get much better gas mileage, do you still have to pay the premium?

Ha, ha–that green discount? Maybe we’ll see it if EnviroCabs realizes they hold a competitive advantage in fuel costs and cut their prices. Until then, how many people are going to turn down seven out of every eight (essentially identical) cabs that drive past?

One Response to “Hybrid taxis”

  1. Daniel Hall said

    You forgot:

    (4) I am going to/coming from the airport.

    (Yeah, I know this is pretty much a subset of 3.) Since this is often a call-a-cab-company-in-advance activity, there may be a chance for product differentiation. And they are in Arlington, with two airports in striking distance….

    Guilt those fliers into eliminating 0.01% of their travel emissions!

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