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Franchise fees also benefits the taxi companies. It constrains the supply to taxis, thus shielding the taxi companies from potential competition. They're paying
by manfredo 8y ago
Franchise fees also benefits the taxi companies. It constrains the supply to taxis, thus shielding the taxi companies from potential competition. They're paying for protection from competition.
- dragonwriter 8y ago> Franchise fees also benefits the taxi companies. In the presence of a substitute service not subject to them, they do not. Actually, since there seems to be both a non-automatic approval process and a franchise fee, they don't really even without such competition; the approval process shields them from competition, the franchise fee is a pure cost. (Of course, there is a linkage between the two, but as long as the process is in place, incumbent taxi firms benefit from minimizing the fee.)