Washington has no medallion system, with the result that it probably has more cabs per inhabitant than any major city in the country.

Washington DC is trying to overhaul its taxi industry. But in this weird, wonderful and anarchic universe, nothing is ever simple - not even what colour they should be.

London's (mostly) black taxis, with their distinctive shape, are as much a part of the city's brand as red buses, Big Ben or the Changing of the Guard. Ditto New York, whose yellow cabs long since achieved movie-star status. But what about the capital of the most powerful country on earth?

Well, yes, we do have black cabs. We have yellow cabs, too. For that matter, we have green ones, red ones, beige ones, blue ones. Indeed, if you're fussy about what colour taxi you travel in, on Washington's streets there's just the one for you. We have cab companies and solo operators. We have dirty cabs, not-so-dirty cabs, even a few clean ones. We have old cabs, not-so-old ones and even a few new ones.

We have some cabs on which a lit light means “for hire”, and others that turn out to be either already taken or not available. One way or another, anything goes. Washington's taxis are an urban jungle on wheels, where practically anyone can jump into the business.

When it comes to taxis, Washington and New York are polar opposites. The city that symbolises capitalism and free enterprise runs its taxi industry like a medieval guild. New York may be about 14 times more populous than Washington, but it has only twice as many cabs. The number is limited by a strict system of medallions - an aluminium badge or licence on the front - of which roughly 13,000 have been issued, and which sell for up to $1m apiece.

Washington has no medallion system, with the result that it probably has more cabs per inhabitant than any major city in the country, 12 per 1,000 residents compared with 2.6 in Chicago, 1.7 in New York, and 3.1 in London. It's not quite Moscow, where you can hitch a paid ride in any private car. But in the American capital, vilified as a symbol of bureaucracy and regulation run amok, pretty well anything goes when it comes to cabs.

Caveat emptor should be the industry's unofficial motto. Needless to say, cabbies here aren't subject to anything like the Knowledge, the exam every driver of a black London cab must pass. Even a reasonable knowledge of English isn't a requirement. And if they don't want to take you somewhere in “the District” - even though by law they're bound to - too bad.

For whatever reason, it's always been like that. Washington may be a seat of empire, home to a government that has sent men to the moon. But amazingly, until only four years ago, taxis here didn't even have meters. Instead, the city was divided into roughly concentric zones, with fares depending on how many zones were crossed during a journey.

With a decent map, the system might have been comprehensible. But the only help you usually got was a skewed rendition of Washington and its environs, stuck with yellowing tape to the back of the driver's seat. North wasn't even north, but pointed to the northwest. The whole thing might have been a 15th-century projection of the globe, about as easy to read as a darts board in a pub where the lights were out. The only thing that stopped the system being a guaranteed rip-off was that many drivers didn't understand it either.

But change, finally, seems to be at hand, if for no other reason than embarrassment on the part of the city fathers. With its rich history, its wonderful museums and ever-improving restaurant and entertainment scene, the once sleepy Washington is turning into a truly world-class city. But one amenity is missing: a world-class cab service. Which matters. As Vincent Gray, the mayor, puts it: “If at the airport or hotel a visitor finds himself getting into a hunk of junk, it can leave an indelible impression.”

Last July, the city council took an important first step, approving a Bill under which all taxis would have a meter system that accepted credit cards and provided automatic receipts, and be equipped with a device that allowed passengers to pay direct in the back seat. In service, the cabs would be tracked by a GPS system. Cabs won't be more than seven years old; more of them will be disabled-accessible, while the overall size of the fleet could be limited too (whisper it, but even in Washington, medallions are on the way). Finally, there will be more inspectors. The new rules won't fully be in force until 2020, but unsurprisingly, the drivers and companies are up in arms, complaining they are being turned into “share-croppers”.

However, one big question remains unanswered - whether to have a New York-style colour scheme. Earlier this month, Gray came up with four proposals, but all were comprehensively panned. Couldn't a place with as much design talent as Washington, it was asked, come up with better?

Part of the problem were the colours themselves. One, in red, white and blue, looked like a cross between the liveries of the city's police cars and its professional sports teams. Two others featured tacky combinations of white, yellow and green - giving them the feel of a tropical cocktail. The fourth, perhaps the best of the bunch, was half-red, half-white. But like the other three, its colour bands sloped diagonally down from back to front, like Formula One racing cars. None added anything very world-class to Brand Washington.

In terms of gravitas, a single colour would probably be best - but it might make the taxi hard to distinguish from ordinary cars (except if the colour was yellow, but New York already has yellow ones). Almost certainly, it's back to the drawing board. As I said, when it comes to Washington and taxis, nothing is ever simple. - The Independent on Sunday