Licensing is Anti-Consumer

Via Carpe Diem, yet another group of market incumbents using licensing and regulation to limit competition and, in particular, ban business models different than those of the incumbents.

From the Institute for Justice: "Until 2010, sedan and independent limo services were an affordable alternative to taxicabs in the Music City. A trip to the airport only cost $25. But in June 2010, the Metropolitan County Council passed a series of anti-competitive regulations requested by the Tennessee Livery Association - a trade group formed by expensive limousine companies. These regulations force sedan and independent limo companies to increase their fares to $45 minimum.

The regulations also prohibit limo and sedan companies from using leased vehicles, require them to dispatch only from their place of business, require them to wait a minimum of 15 minutes before picking up a customer and forbid them from parking or waiting for customers at hotels or bars. And, in January 2012, companies will have to take all vehicles off the road if they are more than 7 years old for a sedan or SUV or more than 10 years old for a limousine.

  • carnahan

    I donate to the Institute for Justice on a regular basis. They do great work using their attorneys to fight this sort of nonsense. Typically they represent folks and causes that don't qualify for Legal Aid but are not wealthy enough to afford high power and high-priced legal talent. In other words, most citizens.

  • Don

    Wow! Looks like that regulation was written by Louie De Palma.

  • marco73

    The 7 year car/10 year limousine age rule is the most odious. So a 2005 sedan is a throwaway in Nashville?Startup businesses that may acquire older but still serviceable vehicles will find themselves having to shell out significant capital to purchase newer vehicles.
    What makes me think that right before the 2012 cut off, existing companies will have all their vehicles, regardless of age, "grandfathered" in to be exempt for the age cutoff.

  • TomG

    Don't you just LOVE how in nearly every case like this, the extra regulations are never ever requested by the most important group - the consumers? I think I heard about similar tactics a year or two ago in regard to gypsy cabs in Washington DC - there were NO consumer complaints, but the regulators claimed that there was some (nonexistent) problem with the current arrangements.