Starting tomorrow you can hail a taxi in certain parts of Los Angeles. This is a pilot program designed to make taxi use easier and more convenient, especially for Hollywood evenings. This is a great move and all cities should allow taxi hailing. But there are problems, too, in determining the optimal amount of cruisng the taxis should engage in looking for fares.
Taxis cruising around looking for fares are wasting gas, polluting the air and causing congestion, plus there may be some fare discrimination. The optimal amount of cruising should be less than the amount of driving cabs do when they are called for and reserved, but greater than the cabs sitting at a few stands waiting for people to show up. How much cruising this amounts to is a vexing question, especially in New York (and now in LA). Because the benefits of a lot of cabs exceed the costs (compared to private autos), a taxi oriented community should leave everyone better off. But it's not clear what the best way to dispatch taxis is.