The central government has finally set up a committee to suggest a policy framework for taxi and other transport operators. The world over, taxis are regulated for price and quality. Without regulation, each taxi ride would entail price negotiation and a series of checks: does the driver have a valid licence; is his behaviour acceptable; is the car in suitable condition, etc. The burden on each consumer to overcome these transaction costs would render the market unworkable. Regulations address these market failures.
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