This study analyzes the impact of deregulation on taxi fares in Italy and Spain, comparing tariffs across 22 Italian and 13 Spanish cities using data extracted from Numbeo. To ensure a fair comparison, nominal fares were adjusted for the local cost of living to obtain Purchasing Power Parity (PPP) values. The statistical analysis, conducted via a Student's t-test, reveals a highly significant difference (p-value ~ 0.001) between the two countries: Italian tariffs are systematically and markedly higher than Spanish ones, with a net gap of 3.162 PPP points between the medians. This discrepancy does not depend on the overall cost of living within the individual cities, but rather stems from political choices and governance models; the Spanish regulatory framework, historically geared toward greater flexibility and competition in non-scheduled public transport, successfully delivers much more affordable and competitive prices for the end consumer compared to the Italian system.

Grounded in Public Choice theory and free-market economics, this research analyzes how local government interventions distort market dynamics in the Italian taxi sector. By examining a dataset of 22 cities, the study normalizes taxi fares against local purchasing power and maps them against license density. Through a log-log regression model, the analysis proves that strict administrative caps on licenses generate massive allocative inefficiencies and protect position rents at the expense of urban consumers ($p\text{-value} = 0.028$). Beyond confirming the negative impact of regulatory capture, the paper provides a mathematical refutation of protectionist arguments, showing that market liberalization would lower barriers to entry and enhance citizen welfare without causing a chaotic price collapse.