POLITICS

Regulatory Robbery, Portland cabbie edition

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Politics,Beltway Confidential,Timothy P. Carney

When politicians and bureaucrats pushing regulation to protect politically connected incumbent businesses, they usually at least prtend it has something to do with public safety, consumer protection, or the environment. But not in Portland, where the government is pushing minimum-fare rules and other laws to constrain town-cars from competing with the cabbie cartel:

Frank Dufray, administrator for Portland's Private-for-Hire Transportation Program, which regulates both taxi and livery services, said the laws aren't intended to help consumers or the city, but to protect market share for the taxi industry.

This Portland story, from the Huffington Post's J.L. Greene is well worth a read It's pretty brutal:

Fiesta Limousine and Pacific Cascade Towncar offered a Groupon for one-time limo or sedan rides at $32, well under the mandated minimum fare. After the offer went live, Portland taxi companies complained to the city. City officials responded with threatening letters to Fiesta and Pacific, and insisted that Groupon remove the promotion. The city then fined Pacific $659,000 and Fiesta Limousine $250,000, based on the number of Groupons sold. The companies were told that if they honored the Groupons, they'd lose their operating permits. Both companies escaped the harsh fines by refunding the Groupons, but each still paid a $500 fine for advertising services under the minimum fare.

Fiesta Limo and Pacific Cascade declined to comment, citing possible legal action.

While my friend Mark Hemingway might suggest that this sort of Big Government insanity is a symptom of Portland's uniquely pernicious ways, cabbie-cartel regulatory robbery shows up all over the place.
D.C. Mayor Vincent Gray, elected with the full backing of the cabbies and nearly every other incumbent special interest in Washington, has been working to protect cabbies from competition, Megan McArdle reported recently in the Atlantic. Barton Hinkle at Reason magazine also wrote on D.C.'s war on competition. [I seem to recall a story about a cop conducting a taxi cab sting by letting people offer her a ride home, and then asking "how much do I owe you?" but I can't find the story.]
There's nothing unique about cabs. Across the whole economy, industry incumbents seek protection by means of regulation. 
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