Taxi economics in Paris

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This is not a Grinch who stole Christmas or a post about Uncle Scrooge, but it does have to do with money (economics) and service…

During the last public transport strike in Paris in November, I avoided as best I could taking a taxi. Aside from the staunch traffic jams and eco-guilt*, I was not keen on padding the taxi driver’s pockets. Instead, I hoofed it as frequently as I managed my timing. Adding the practical (exercise) to the ecological.

One day, I was forced to cab it. Not that it was quicker, but the bags obliged. I happened upon a talkative and, possibly frank, driver. We struck upon the topic of profitable rides. What is a profitable ride for a Parisian taxi driver? By the judge of how many rides I have been refused, I assumed there was an unwritten rule not to take passengers like me, whatever I may look like.

As we may yet enjoy more strikes in Paris in the new year (are you kidding me about the subjunctive?), I recount what I was told about a taxi driver’s profit motive. There are no fast rules as the traffic will vary with great inconsistency. [I did not get to discuss the different fare zones according to time of the week, area of Paris].

For the trip to the main Charles-de-Gaulle Roissy Airport (27km north-east of Paris), the typical fare is 45-50 euro for 35 minutes work–“well worth just heading back into town empty,” said the driver (rather than waiting the 2-3 hour wait at the airport). I can infer that 45 E for 70 minutes (minimum) translates into a good hourly rate (38.6E).

Naturally, as with any trip, the fare and duration depend entirely on the traffic. The driver recounted that intra muros Paris with the strike in full swing meant 30E for a 60-minute fare stuck in traffic. Plus, there is no “rest” (as in need to deal with a client). And there is the added stress of the constant gridlock and unhappy co-drivers.

That said, the economics of the taxi have been steadfastly manipulated. Courtesy of a Vox on-line article entitled, “The price of suspicion,**” I discovered that there used to be 25,000 taxis in Paris…in 1925! I quote from the article: “For fear of competition, those concerned latch on to a Malthusian system (25,000 taxis in Paris in 1925, 15,000 in 2005) – of which we know the result; users can’t find a taxi when they need one, and drivers practically have to bleed to death to get the famous taxi-badge – a clear example of a lose-lose outcome.” Clearly, market supply has been carefully strangled.

From another article, “Paris Capitale Taxis,” I find the statistic that, “…in 2005, each day 15,200 taxis carried more than 350,000 customers, i.e. 190,000 trips per day.” This means that each taxi (the car itself, as many cars are driven by multiple drivers), has 12.5 trips per day on average. If the average ticket (including tips) were about 13E (1 ride to the airport and the remainder at 10E), the daily revenues would be 185E or 55KE over a year containing an arbitrary 300 work days.

I am not in a position to know the costs for the driver (cost of the license currently estimated at around 200KE, fuel, insurance, amortization, etc.), so this is not an economist’s analysis. What I wanted to do was get into the taxi driver’s psyche–his/her top of mind profit motive.

Meanwhile, I still can’t figure out the reason why the counter must be set to begin at 2.10E, yet the minimum fare is 5.60E. Why not just begin at 5.60E and let it sit at that price until such time as the distance warrants the uptick? It just doesn’t make sense to have a metre read 4E at the end of an ultra short (and totally profitable) trip and yet be obliged to pay 5.60E minimum anyway.

In any event, there is talk of change of the regulations…as per this recently published French Journal de Dimanche article “Revolution en vue pour les taxis parisiens” in order to encourage more taxis back into Paris. The JDD article says that there are now 15,600 taxis in Paris. Hopefully, the new year’s resolution will also include making more as well as nicer cab drivers.

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*As with many expressions I make up, I think I’m being orginal, but it turns out, as usual, that the term eco-guilt has been broadly used across the Net. I cite a couple that I enjoyed:
Coffee, tea… eco-guilt? A not so complementary view of Virgin Atlantic’s ploy…
The twitch of Eco-guilt… the guilt of enjoying a holiday in a non eco-friendly location such as Dubai

**This article, written by Professors Algan and Cahuc, presents a (very cogent) history from which has grown the current state of affairs in France (worth the read).

3 Comments, RSS

  1. Pretty crazy that there are only 13000 in NYC compared to Paris (when you think of the population living & working in each city)… The yellow cabs seem everywhere and they usually are after your business. Only when it rains or around the big nights (New Year’s etc) does the situation worsen in NYC.

  2. Why do Parisians have a reputation and/or a stereotype for being rude?…

    Coming to this mème with a little retard, as Parisians are wont, it is hard for me not to notice that the majority of comments here are positive, in defense of Parisians. Being negative, on the other hand, invites anonymity. I have both French and Amer…

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