January 31st, 2013

This Is Why We Can’t Have Nice Things (Government Overregulation Edition)

Those familiar with Uber swear by it as a wonderful alternative to regular taxi service—which typically involves desperate pleading and begging on the part of would-be customers as they try (sometimes futilely) to hail a cab. Perhaps one of the most prominent fans of Uber is Megan McArdle; see her writings here, here and here on Uber’s services. As McArdle notes, the DC Taxi Commission hates Uber with the fury of a thousand red giants since Uber has the temerity to compete effectively with DC taxi drivers and since the taxi drivers have a lot of pull with the Taxi Commission. If Uber ends up getting regulated into irrelevance or out of existence, the only people who will lose will be consumers in DC, but the DC taxi drivers and the commission don’t really care about that. They just want what they believe to be theirs, and to the infernal regions with the consumers and their wants and needs; as far as the drivers and the commission are concerned, this whole business about the customer always being right is just a bunch of taurine waste matter, not to be taken seriously.

Of course, we all know that DC is capable of craziness—after all, just look at the politicians who populate the city. But lest you think that disregard for consumer preferences is limited to DC, check out John Ross’s story:

Uber, the innovative private car service, is under attack again—this time in Denver. Transportation planners at the Colorado Public Utilities Commission (PUC) are proposing rule changes that would cripple Uber’s business model.

Sedans would no longer be able to charge by distance, which is “akin to telling a hotel it is illegal to charge by the night,” says UberDenver’s Will McCollum.

Moreover, Uber drivers would be prohibited from parking within 200 feet of a hotel, restaurant, or bar—essentially barring the service from downtown. Uber customers use a smartphone app to view a real-time map of drivers parked nearby, so the change would mean drivers have to leave downtown and other high-density areas, turn on the app, and then drive back into the city to pick up fares.

If you think that these rules are not explicitly designed to run Uber out of Denver, then I have a Peace, Anger Management and Pacifism course taught by Chris Brown to enroll you in.

And of course, overregulation designed to make innovative businesses go the way of the dinosaur and dodo bird is not limited to Uber, or alternative limousine/taxi services, or DC or Denver. Here, in my wonderful home city of Chicago, we have to put up with food trucks being collectively treated like the Anti-Christ:

… For years city code has stipulated that no food truck can park within 200 feet of a brick-and-mortar restaurant. (Last summer, this ordinance was partially amended to allow for parking between midnight and 2 am.)

Both Balanzar and Hernandez said they go to great lengths to adhere to what city attorneys and many in Chicago’s food truck industry refer to as the “200-feet rule.”

“We went in the middle of the night, just to make sure there’s no traffic or anything like that. And we took a string, a 200-feet of string, and measured from a restaurant to the spot that we were planning to park. Just to make sure we’re 200 feet away,” Hernandez said in an interview at Kitchen Chicago, the West Side industrial center where a number of local food trucks prepare their products.

Balanzar, in particular, says that extra legwork recently paid off during a run-in with police enforcing that 200-foot rule at a West Loop intersection.

“The police came and said, ‘You know what, it’s about inches.’ So they said it’s OK,” Balanzar said.


This past summer, lawmakers tweaked some of those restrictions governing food trucks—granting them new rights, but also introducing more regulations and heavier fines.

For example: Cooking is now allowed in food trucks if the business passes hefty inspections and purchases the necessary equipment. Meanwhile, lawmakers bumped up fines for violating the 200-foot rule to as much as $2,000 and required trucks to have an on-board GPS device turned on whenever it is in service.

City officials said in a statement after the new ordinance took effect last summer that the GPS device helps both the City and customers keep track of mobile food vehicles. But food truck owners say they already reach out to their followers over social media.

Hernandez says he paid $125 for the device, plus a $25 monthly fee—a sum which might not sound like a lot, but he said his business only makes around $19,000 per year.

“I just think it’s wrong. I don’t know any other industry where you have to have a GPS or whether the City or the police need to know where you are 24-7,” he said.

I have written about this issue before. Note that the same silly, stupid “200 feet” rule that applies to Uber in Denver in terms of determining how close drivers can park to a restaurant, hotel or bar, applies to food trucks in Chicago in terms of determining how close they can park to a restaurant. Apparently, the “200 feet” rule is a symptom of a dumb law. For those who still think that government regulations exist to protect us from known and unknown dangers, and could not possibly serve rent-seeking purposes on the part of big businesses that work assiduously to put politicians in their pockets, this is your cue to think again.

I would hope that city governments in both DC and Denver wise up on their own about Uber. And I hope that Chicago’s city government wises up about food trucks. If they don’t, I could easily see some small-government, populist champions making some serious hay about the antediluvian views of the city governments in question the next time elections roll around. And I would see little reason not to support such rabble-rousers as they do so.


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