A huge victory was won for liberty in the San Diego City Council Chamber two days ago — the rent seekers lost the battle to keep competition down. The San Diego City Council voted to lift the artificial “cap” on city licensing of taxicabs.
You might ask, “Why the hell is the City licensing driving? Doesn’t the State do that?”– that would be a fair question. For decades, a small number of businesses have leveraged government to restrict competition in the taxicab industry. The City charges an excessive licensing fees and then creates an artificial market by capping the number of licenses issued. The restricted market is so inefficient that the “medallions” trade for as much as fifty times purchase value in a secondary market.
Ride-sharing services, like Uber and Lyft turned the centrally-planned taxicab industry on its head. Passengers get cheaper rides, an instantaneous rating system, and trust the oversight the technology companies offer. Who was losing? The little guy, of course. Taxicab drivers share in the fixed costs the medallion owners incur while weathering all the risk of the market. Moreover, City-regulated fares restrict how much money the drivers can charge while their ride-sharing competition is profiting at peak-riding times.
Marti Emerald decided to change that by proposing to do away with the government-protected “medallion” cap. “It’s about offering an opportunity for those who want to work in this industry and to achieve for themselves the American Dream,” she said. Emerald drove a cab when she was younger so her advocacy for the operators is understandable.
Scott Sherman, the loudest voice for free enterprise on the Council said, ““This is a critical first step. We need to deregulate and take government out of it.” Sherman is one of the two business owners on the Council so his support was expected.
The pro-freedom measure was so popular, it passed 8-1. Which statist Democrat opposed the idea of individual entrepreneurship in the City of San Diego? That recently elected Republican, Lorie Zapf. When voting against the measure, she said, “I haven’t seen any data on what the impacts would be. It has been rushed.”
Her vote is either tragic or nefarious. If Zapf doesn’t understand the benefits which a free market brings society, she needs to read the old but potent pamphlet, “The Law“. If she understands but willfully rejects those benefits, she should be confronted for doing the rent-seekers’ bidding.
The role of government is not to pick winners and losers in economic activity. It’s not to decide how big or how small a market should be. It’s not to grant mercantilist power to a small group of business people. It’s not to extort profits from efficient operators to redistribute to others. It’s not to create shortages through pricing mechanisms.
San Diego needs to get out of the taxicab controlling business — today rather than tomorrow. For doubters who need data, pull the iPhone out of your pocket — it wouldn’t be there if we still had this dinosaur.
Comments 1
Face palm for Lori Zapf!