Abstract: The government regulates public service commonly because of its attribute of public product. However, after 1980s, the regulation faced challenges from theories and practice, and the voice of relaxing regulation becomes higher. This article, taking the admittance regulation in Beijing taxi as an example, analyzes the actuality and effect of regulation, and gives some advice on reformation. If the bad effect of regulation and the failure of market exist at the same time, it is not comprehensive to relax regulation only. We should innovate regulation and regulate properly on the premise of effective competition.