As a driver with Yellow Cab and a holder of a bachelor's degree in economics, I might be able to shed some light on the current debate over efforts to relax taxi regulations in Colorado ("Debate over taxi rules/Lawmakers propose bill that partially deregulates industry," Business, March 13).

It is indeed difficult to get a taxi in Denver. This has led many to conclude that there is a shortage of taxi drivers. Thus the debate has focused on how to increase the number of cab companies operating in Denver and, hence, the number of drivers out at any given time. However, as the photo that accompanied the story cited above suggests - a photo showing scores of idle cabs at Denver International Airport - the problem is more of distribution than supply.

A common misconception is that cab drivers are employees of their companies and are at the beck and call of the dispatch system. A long wait for a cab must mean there are not enough drivers to keep up with the volume of calls. In fact, we are independent contractors who lease our equipment from a cab company but pay heed only to our own rational self-interests in deciding where to place ourselves. For most drivers, that puts them at the airport where they are guaranteed a $30 to $50 fare rather than chasing after a $10 fare in the suburbs. Supply-side solutions to the problem are only likely to increase the length of the cab line at DIA while service in the suburbs and fringes of Denver proper remains as miserable as ever.

The real question is, what can be done to give drivers the incentive to respond to more dispatch calls and lure them away from the airport? The answer is, find ways to increase the value of dispatch calls and decrease the costs of responding to them.

Gas prices continue to climb while the value of trips remains regulated below market-clearing price. Having the Public Utilties Commission authorize a meter rate increase or perhaps a state subsidized bonus system for drivers who respond to a minimum number of dispatch calls might help this.

Most drivers have V8 Crown Victorias that get about 12 mpg. As I have watched gas prices climb I have definitely noticed myself giving preference to cab lines where I can shut my engine off and wait for a fare to come to me. Perhaps a state gas tax refund to taxi drivers might make us more willing to eat up gas chasing a call. Even more ambitious would be to subsidize a fleet overhaul to improve fuel economy and require new taxi companies to meet minimum efficiency standards with the fleets they introduce.

The distribution problem is a tricky one and it is essential that policy-makers consider it when confronting Denver's growing demand for taxi services.

Bryce McPherson is a resident of Denver.