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.
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.