Postscript, 1991: After ten years of failure, by 1991 radio-dispatched taxis were at last working in Palermo. In 1987 there had been no more than forty cars, and drivers were dropping out, whereas in 1991 the largest cooperative had 160 cars linked to the radio. How was the problem circumvented? In 1989 the drivers devised a new allocation system (as far as I know it is not applied anywhere else in Italy). Drivers qualify for calls by lining up in local parking lots; on arrival they declare their position to the operator. The operator allocates the call to the first driver in line in the parking lot nearest the caller. Even if another driver is passing closer to the caller, the call is nonetheless allocated to the first in line. The taxi's position is known in advance to the operator, and the other drivers can double-check simply by looking around the parking lot. Only when the nearest parking lot is empty is the call given to the driver who claims to be closest. To reduce cheating in this case, the operator attempts to keep track of destinations, and so too do the other drivers by keeping the radio on. As a result of this innovation in organizational technology, cheating is prevented and self-policing is avoided. It must be stressed, however, that this system is not a solution to the problem as I have described it but rather a different system altogether, more akin to the one which was used before the radio was introduced and in which the customers themselves telephoned the taxi rank. This new system is not efficient from the point of view of the customer, who on average waits longer and pays more (the meter starts running at the moment the call is taken). Customers living in the suburbs, in particular, are penalized, for parking lots are concentrated in the city center. Still, it is better than no taxi service at all.

XREF: Connects to the broader book's theme of self-organizing coordination systems and the Coasean problem of who bears the cost of information verification.

Diego Gambetta, The Sicilian Mafia The Busi…, loc. 605