Supporters of a push to relax taxi regulations in Colorado say the move could lower prices, bolster service and benefit cab drivers by opening up a market largely closed to new competitors.

Opponents argue the opposite will occur: A flood of new cabs will lead to price gouging at peak times and an overall erosion of service as drivers focus on higher-paying trips at the expense of shorter, less-profitable ones.

So which side is right?

Neither . . . and both, say consultants, economists and transportation experts who have studied taxicab regulation.

Experiments with various forms of regulation in other areas show that each community must adopt policies based on its own circumstances and goals. The bottom line: There is no clear-cut model that can be applied to every city, experts say.

Taxi regulation "must be carefully tailored to market needs and local conditions," transportation consultant Bruce Schaller wrote in a study released last fall. "While there is much to learn from the experiences of other cities and counties, taxicab regulatory decisions also give heavy weight to each jurisdiction's unique attributes."

Taxi regulation has become a hot-button issue in Denver recently amid complaints from disabled residents, seniors and others about inadequate service. Legislators have written a bill that would partly deregulate Colorado's taxi industry by allowing unlimited certification of new cabs.

That could usher in more competition for Denver's three taxi companies. Those behind the legislation note the industry here is governed by state regulations that make it "nearly impossible for a new company to start under the current system," said Rep. Jerry Frangas, D-Denver, who sponsored the bill.

Finding a satisfactory, successful regulatory model can be difficult. Dozens of cities in the U.S., Canada and elsewhere have experimented with different forms of deregulation, with mixed results.

In some cities, heavy regulation essentially created market dominance among only a handful of cab companies, leading to poor service for certain geographical areas. In other cities, deregulation created some of the same service problems and led to financial hardship for individual drivers.

Cities that are successful, experts say, have been able to foster competition and use regulations to ensure adequate service.

"A lot of markets have ended up someplace in between" regulation and deregulation, said Schaller, who worked for nearly a decade as the director of policy development and evaluation at the New York City Taxi and Livery Commission. "One successful approach, possibly for an area like Denver, is to control who can service the airport and then open up the market elsewhere."

Entry restrictions and other regulations work differently in markets reliant on dispatch services, as opposed to larger cities with more people who hail taxis or catch cabs at airports and hotel stands - a big component of Denver's market.

Adrian Moore, who has studied the issue for years, said cities should incorporate some customer service regulations and other policies. But he leans toward deregulation, saying open-entry policies create competition.

"It is impossible for anyone to sit down and figure out what the right number of taxis is for a city," said Moore, vice president of the Reason Foundation, a nonprofit think tank that says it promotes libertarian policies. "Forget about trying to control the number. Focus on qualitative measures where there are real problems that customers can't control."

Opponents of the new legislation say reducing regulations could lead to an influx of new cab drivers who will chase higher fares to and from Denver International Airport. That could leave gaps in service around the metro area and create chaos at DIA.

Still, they are eager to join the discussion, and legislators say they are tailoring the bill to meet some kind of middle ground.

"I think we need to have a group of people from the convention bureau, the airport, and the taxi companies study the issue and come up with recommendations," said Denver Yellow Cab President Brad Whittle. "I'd feel a lot better talking about a bill like that."

House Bill 1114

• What it would do: Open up the market for new cab companies and individual drivers by lowering entry barriers. Companies essentially could offer service after meeting some basic conditions, such as paying certain fees and meeting safety, insurance and service requirements.

• Status: Passed through the House Transportation and Energy Committee but recently was sent back so lawmakers could iron out some concerns.

• Possible revisions: Lowering the proposed nominal application fee for cab companies and individual providers; ensuring Colorado has enough cabs to serve demand; requiring companies to have a certain percentage of handicap-accessible vehicles; requiring new entrants to have 25 cabs and 24-hour dispatch service.

walshc@RockyMountainNews.com or 303-954-2744