Competition in Italy

Having lived in several countries, it is always fascinating to see differences – the good, the bad and the ugly that every country in the world has. The transport sector in Italy provides two interesting examples of the power of competition, a positive and a negative one.  Let’s start with the positive – long-distance fast trains. There are two companies sharing the same rail infrastructure and competing with each other. This seems to have really reduced train fares (with two weeks in advance, for 20 euros to Rome, a 90 minute ride). And while not all trains are punctual, the record is certainly better than currently in Germany, including with respect to informing passengers.

The negative example is the taxi monopoly and the absence of Uber or any other competitor for the traditional taxi industry. The results are extremely high taxi rates (compared to other European countries where I have lived) and limited reliability (as I often have to take very early flights I have to rely on taxis) – as I found out the hard way, reserving a taxi for 5 am does not guarantee that there will actually be a taxi – at least you get a text message at 4:58 letting you know there won’t be a taxi ☹.  And the power of taxi drivers goes beyond their own segment. Both Bologna and Pisa airports are connected to the respective train stations with shuttle trains, which take 5 to 10 minutes, with a price of one euro per minute of the short (and often crowded) ride! These high prices are supposedly to match the price of a taxi drive between airport and train station.

I am not sufficiently versed in Italian political economy but one can clearly see that competition works if implemented properly.