Since the article doesn't get into your purported statistics, I can only speculate as to what you are referring to. People in the U.S. often try to retroactively justify tougher drug laws by pointing to lower crime rates, when in fact often times people are simply less likely to report being victimized because they were engaging in an illegal transaction.
Moreover, reality has a way of resisting controlled experiments. It is essentially impossible to control every variable that might influence reported crime rates, so the mere fact that there may be fewer reported taxi-related crimes after regulation increased than before would be an unconvincing argument.
This is really an epistemological argument. Due to the inherent uncontrollability of every variable, the only way to accurately understand the effects of a government policy are to look at the economic incentives it creates. Simply asserting that economic incentives that underly the drug market don't also apply to other black markets is arbitrary.
And you simply asserting that the economic incentives that do underly the drug market apply everywhere is every bit as arbitrary!
Drugs are not like cabs. You can't get a licensed drug after five minutes wait. Nobody actually wants or needs a specifically illegal cab, they just want a cab. The analogy simply does not work.
What's unconvincing is you calling my argument a fallacy and then falling back to "oh but it's hard to measure!"
--edit-- also FFS you think anyone's put off reporting assault because they were in an illegal cab? What the hell are you on? It's not illegal to be a customer, it's illegal to run the service.
It isn't arbitrary to assert the universality of economic laws -- no school of economics holds otherwise. In fact the entire point of this science is to discover principles that exist in all circumstances.
Moreover asserting the difficulty of empirical measurement isn't a cop-out; it's one of the most fundamental debates, not just in economics, but in philosophy. This is Plato vs Aristotle, or Kant vs Hegel. It's an incredibly important issue and not one to dismiss so nonchalantly.
Regarding the likelihood of reporting assault, I was specifically talking about drugs. You are probably right about the unlicensed taxi customers, but nevertheless the statistics for taxi assaults don't tell then whole story because there is no way to account for assaults that occurred elsewhere that would have occurred in taxis has they been more readily available. Even if that data were available, the uncontrollability of other factors would continue to burden your attempts at empirical proof.
It isn't arbitrary to assert the universality of economic laws
But it is arbitrary to assert that it works identically for all commodities and services. Demand for some things (a ride home) is easily sublimed from one solution (unlicensed cab) to another (licensed cab). Demand for other things (heroin, weed, whatever) does not work the same way because the demand is 100% aligned with the illegal item and therefore far more likely to set up a much larger black market.
I think you would have a very hard time proving that the crime levels stayed the same and the crime had just moved. Allowing unlicensed, unregistered cabs that pick (mainly drunk) people up from the side of the road, was putting vulnerable young people at risk. At least some of this demand has been shifted to traceable, regulated businesses.
Of course a fully-illegal thing will create a larger black market than a partially-illegal thing, but that's only a quantitative difference; the economics of the resulting black market remains then same. As long as they are outside the legal system, they will experience more violence, and unscrupulous people will continue to falsely claim that this justifies further marginalizing and regulating such activity.
Except when you talk about something like drugs it's easy to show the total violence increases, and when talking about something like unregulated taxi firms you can't make any such claim because it's easy to see how that market is killed dead with little to no black market, because nobody particularly wanted the product in the first place, it was just there.
Moreover, reality has a way of resisting controlled experiments. It is essentially impossible to control every variable that might influence reported crime rates, so the mere fact that there may be fewer reported taxi-related crimes after regulation increased than before would be an unconvincing argument.
This is really an epistemological argument. Due to the inherent uncontrollability of every variable, the only way to accurately understand the effects of a government policy are to look at the economic incentives it creates. Simply asserting that economic incentives that underly the drug market don't also apply to other black markets is arbitrary.