Taxi drivers are corrupting Italy Politicians can't resist the cartel economy

Recently, an octogenarian couple from the UK came to visit me in Parma. Theirs was an all-day journey: a three-hour car trip, a two-hour flight, then a three-hour train journey. By the time they finally arrived, they were exhausted.

But then came the sting in the tail familiar to all Italians: there were no taxis for the final three miles of the journey. The buses were done for the day, so I just stood with them in a state of astonishment, waiting in line behind dozens of frazzled commuters and bewildered tourists for white cabs that arrived once every 10 minutes. It was more than an hour before we got a lift.

In Italy, passengers queue for taxis rather than vice versa. In the whole of Abruzzo, a region with almost 1.3 million residents, there are only 97 licensed taxis. Rome has only 28.5 taxis for every 10,000 citizens. And Palermo has a mere five licensed taxis per 10,000 residents. The comparable figure for London, with a far more extensive public transport network, is 106.

The reason for this dearth is the refusal to issue new licences. In Genova, no new taxi licences have been issued by the city council since 1980. In Livorno, none have been granted since 1977, and in Napoli, despite its explosion in tourism, taxi licences haven’t increased since 1997. Rome hasn’t increased its taxi numbers for nearly 20 years.

It’s hard to ignore the problem. At peak times outside every major railway station, there’s a 50-metre or so queue of people waiting in vain for a lift. According to AGCM, Italy’s Competition Authority, in June last year, 46% of all calls to Roman taxis went unanswered. That same month in Milan, the figure was 42%. In July 2023, 49% of all requests for a taxi in Napoli were ignored. AGCM has since launched an investigation into monopolistic, cartel practices, denouncing “the significant shortfall of supply in relation to demand”.

“The current situation is disastrous in the main cities,” says Carlo Rienzi, President of the consumer-rights organisation, Codacons. “As soon as foreign tourists arrive in Italy, they suffer a malfunction that is unparalleled in the rest of the world.”

But there’s more at risk than the serenity of tourists and commuters. Night-clubbers here rarely take taxis home. Some risk drink or drug-driving, leading to what has become known as the stragi del sabato sera — the “Saturday night massacres”. Others, including my three teenage kids, just call their parents when the fun is over. Though it’s not only parents who double as cabbies: some cities have experimented with deploying buses as cabs, resulting in the odd spectacle of a 40-seater vehicle driving across a city to pick up one person.

Naturally, this shortfall of supply suits cabbies perfectly. The basic laws of economics — that prices rise as supply dwindles — doesn’t quite apply to Italian taxis because there are set tariffs: a starting day-time price of, for example, €3 in Rome, or €3.40 in Bologna. There are no algorithms that push higher prices according to demand, as is the case with Uber. But the scarcity of taxis does mean that drivers are never idle; there is always money to be made.

Crucially, they are paid mostly in cash. In December last year, a survey by Altroconsumo — a consumers’ rights publication akin to Which? — discovered that 18% of taxi drivers refused card payments. That figure rose to 30% in Naples and 40% in Bari. A female friend of mine who was on a book tour in Naples a few years ago was violently insulted when she insisted on paying with a card. And every month or two, a similar story crops up in the press: in August 2022, for instance, two Australian tourists had their souvenirs smashed by an irate cabbie when they tried to pay by card.

The reason is obvious: tax-avoidance. According to the Italian Ministry of Economy and Finance (MEF), the declared average earnings of licensed taxi drivers in Rome is €12,817 per annum. In Palermo, it’s €9,489; in Napoli, it’s a laughably low €6,275.

Even if no one believed those figures, it was, until recently, hard to disprove them. Then, in May last year, a renegade taxi driver from Bologna, Roberto Mantovani — who uses the moniker “Redsox” — started publishing his daily earnings on social media. He put everything out there: cash payments, card payments and a daily total. On most days he earned between €500 and €600. In the three months of May, June and July of 2023, during which time he worked 47 days and nights, his gross earnings were €25,091.

“Within a week of publishing my earnings, my tyres had been slashed,” Mantovani tells me. “It was an almost Mafia operation to shut me up. I know it was my colleagues; I recognised one of them from the CCTV.” There are, obviously, many variables, but he estimates that his peers earn between €5,000 and €9,000 gross a month.

An affable man with a bald head and trim white beard, Mantovani has been the target of a sustained hate campaign. “I receive excrement in the post,” he says, “I get rubbish left on my car. My colleagues hate me profoundly, they spit on me and my car.” He was even suspended for a week for “damaging the honour of his [taxi-drivers’] cooperative”, called Cotabo, and was excluded from a refresher course about defibrillator use because his colleagues refused to attend if he was present.

Their fury is hardly surprising: Mantovani’s transparency has cost his colleagues tens of thousands of euros in lost earnings. The discrepancy between his earnings and theirs is too vast to be credible, and so they’ve had to increase the amount they declare to the tax authorities. “I’m undermining that block of €4,000 to €5,000 placed in cash on the family table every month,” he says.

Yet the real money isn’t being made from tax evasion, but from selling coveted taxi licences at inflated prices. Recently, undercover reporters from Le Iene, a satirical TV programme, filmed a Bologna driver offering to sell his licence for €285,000. Mantovani tells me that he paid €250,000 to acquire his licence eight years ago (from a cabbie who wanted a change of career). Now, though, he calculates its value has probably fallen to around €200,000, reflecting the recent 10% increase in the size of Bologna’s taxi fleet.

A taxi licence is a lucrative investment, guaranteeing years of tax-free earnings. “The business plan is straightforward,” says Gabriele Grea, a Professor of Economics at Milan’s Bocconi University. “An upfront investment in a licence must pay back in a reasonable number of years of activity in a regulated market, where competition is limited by law. The licence keeps its value in order to guarantee a serene retirement.” That business plan, however, relies on vetoing any new licences. If, as AGCM has urged them to, city councils do increase the number of taxi licences by 20%, the value of the asset will fall. In which case, taxi drivers would find their cushy retirement plans under threat.

As a result, every time a city council attempts to issue more licences, the city risks being grid-locked by thousands of taxis either on strike or a go-slow, which involves driving at 5-mph through the city en bloc. Mantovani calls the taxi-drivers’ lobby “a great economic and military power. We’re an economic power because we bought a part of the public service. We’re a military power because we’re a small army. We can block the roads. Everyone’s scared of taxi-drivers, we’re the last of the untouchables.”

Perhaps this explains why politicians are reluctant to act. “Taxi drivers are greatly feared by the political class,” says Rienzi. “They have an absolute supremacy compared to other workers. With their protests they’re able to hold in check millions of citizens.” While there are only around 35,000 taxi drivers in the country, their relatives — who also benefit financially from protected privileges — swell to around 150,000 the number of people who will fight any political party that attempts to change the status quo.

Taxi drivers also have a trapped audience upon which they unleash their opinions and prejudices. I’ve frequently been monologued to by taxi-drivers who use their cabs as soapboxes, ranting against a particular mayor. It’s easy to imagine that local politicians live in fear of this loquacious lobby.

As a result, legislation regarding taxi drivers is invariably in their favour. Despite hard lobbying, Uber has been unable to enter the Italian market in any meaningful way. Uber drivers are obliged to have a “luxury car”, making them more costly than the white cabs. And while in the past, taxi drivers shared between themselves 80% of all monies from the issuing of new taxi licences, new legislation from last summer, the “Decreto Asset”, decreed that that proportion will now rise to 100%. It’s been estimated that, if licences were increased by 20%, each extant licensee would receive €35,000.

I’ve found it almost impossible to find anyone willing to defend the taxi drivers. Of all the various taxi unions, only Federtaxi replies to my enquiries. “If you say to me,” says Claudio Gianandrea, a Federtaxi representative, “that there’s a situation of distress, I would agree with you. But I’ve been in service for 30 years, and I’ve never seen anything like last year.” He believes that the problem lies not in the lack of taxi licences, but in a post-Covid tourist invasion combined with widespread roadworks and municipal upgrades across Rome as it prepares for the 2025 jubilee. He points out that, despite runaway inflation, taxi fares haven’t risen for 12 years.

In many ways, though, this isn’t a niche story about transport blockages, but about Italy’s flat-lining economy. One of the major factors behind Italy’s economic woes is its tendency to protect professional cartels. Although such privileges have been chipped away in recent years, there are still many professions — including notaries, chemists, and notoriously beach-front bagni — that keep prices eye-wateringly high, standards low, and competition at bay. One city councillor I spoke to said that in his southern town, the local chemist was “richer, more respected and more powerful” than the mayor.

The EU has repeatedly attempted to force competition on this sclerotic economy, but the country artfully ignores all such edicts. In some ways, its ability to resist market forces is almost admirable. If Italy often feels enchantingly medieval — with luthiers, leather-workers and book-binders toiling away in city cellars — it’s partly because it has been able to shelter artisans and their medieval guilds from the gale-forces of globalisation. But if you come here for such other-worldly charm, don’t be surprised when you can’t find a taxi to take you to your hotel.

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Tobias Jones lives in Parma. His Ultra: The Underworld of Italian Football won the 2020 Telegraph Football book of the Year.

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