by Mitch Kokai
Senior Political Analyst, John Locke Foundation
If you’re heading to the nation’s capital any time soon, you might feel compelled to catch a cab. It’s too bad D.C. leaders want to limit your options, as R Street explains.
The R Street Institute is concerned that the decision by the District of Columbia Taxicab Commission expanding sedan regulations to bar mid-sized, fuel-efficient vehicles robs consumers of choice and creates an anti-competitive atmosphere in the district.
The decision appears clearly intended to forestall the company Uber – which the D.C. Council formally approved to offer sedan-on-demand services in December 2012 — from rolling out its new, lower-cost option “uberX,” which makes use of hybrid vehicles.
“Banning uberX is a cynical move to protect cabs from competition,” R Street Associate Policy Analyst Michael Hamilton said. “Uber has done more to ensure that D.C. residents have access to pleasant for-hire rides at a fair price than the D.C. Taxicab Commission could possibly hope for. If district regulations are designed to protect consumers, then UberX should clearly be allowed to operate.”
Of course, nothing like that ever would happen in North Caro … oh, never mind.
Donna Martinez: … [Y]ou folks at the Institute for Constitutional Law have been looking at different types of regulations in North Carolina that somehow impede that ability to enjoy the fruits of one’s labor. And interesting, Tyler, that one of the things you’re looking at has to do with taxicab regulation. So let’s say I decide I don’t want to do Carolina Journal Radio anymore — that’s not going to happen! — but let’s say that I want to go out and become a cab driver. How easy or how tough is that to do in this state?
Tyler Younts: You would find that it would be fairly difficult in many cities in North Carolina. In North Carolina, taxicabs are regulated at the local level. And, in many cases, they’re actually regulated, oddly enough, by the police department. And there are a couple of different kinds of regulations that you would run into.
One would be cab maximums. So, various cities have different numbers of cabs that they will allow to operate in their cities, so there might be a cap of 140 cabs in a city. If you were the 141st cab, you would not be allowed to open up your cab company. Another type of regulation would be a cab minimum. So in certain cities, there is a minimum number of cabs that you must own before you can open up a taxicab company. The number varies from city to city. It could be two. It could be five. It could be as many as seven.
Martinez: I’m fascinated, Tyler, by the maximums and the minimums. So you’re saying that if I decided that I wanted to convert my personal car to a taxicab, and it was safe, and I was able to get people to pay me to take them somewhere, I couldn’t do it if I just had one car?
Younts: Depending on the city that you want to operate in, that would be a problem. For instance, Mount Airy has a five-car minimum. High Point has a seven-car minimum. And, as I said, it varies from city to city, but that is a real impediment for people that are trying to enter this industry. And it really creates almost a cartel-type mentality, to where the established businesses can use the power of the state to keep competitors from entering the market. And that really has an impact, not only on these businesses, these entrepreneurs that want to start up their own company, but also on the consumers. And the consumers are not getting the benefit that they would under competition.