A sure way to get a government agency to write new regulations is to find a competitive advantage over an established, already regulated, business. Generally, in order to get the attention of the control-everything crowd that dominates government agencies, the first step is a complaint.
Frequently the whining come from those who are themselves regulated. They want a “level playing field.” It is a false request. No one really wants a level playing field unless the other guy has crafted the competitive advantage. Businesses that have found a less expensive approach do not voluntarily provide details to those who haven’t.
In September the California Public Utilities Commission (PUC) approved new requirements for those new businesses that use “ridesharing” to provide short distance travel service. The PUC calls these firms “business transportation network” (BTN) companies and now requires every driver identified by a BTN as a ride provider to have a special driver’s license. It has also imposed other requirements.
There are a number of these BTNs across the state and country. Most offer a smartphone app that allows would-be passengers to post a destination and then have a private automobile owner come by, pick them up and drop them where they want to go.
None of the stories reporting this new regulatory endeavor by the PUC noted any behavior by any of the companies that endangers the passengers. No violence was cited as a need to control these companies. In fact, one problem with BTNs, according to a notice by San Diego Metropolitan System officials is BTNs “are not subject to any government regulations or vetting.” That must raise the hackles of those who see it as their responsibility to manage lives and protect everyone.
Representatives of some of these BTNs called the new regulations valuable. Regulation gives them credibility, they say, as if government regulation gives anything credibility. In the meantime, the taxi industry is not satisfied and has complained that the playing field remains unlevel. They want more requirements for BTNs, arguing that the rules governing the taxi industry are more stringent. One of those requirements caps the number of cabs and has dramatically increased the value of owning a taxi business.
Getting a permit to operate a cab company can mean buying it from someone who already has one. Permits can trade for astronomical amounts. Maybe the BTN owners are anticipating a similar value increase based on limited opportunity because of regulation.
In a different arena, Alan Pentico, executive director of the San Diego County Apartment Association, says California’s Legislature is attacking another successful voluntary activity. He explains, in a piece in the San Diego Daily Transcript, that AB 1229 would undo nearly two decades of negotiated cooperation between local units of government and the contractors who build apartment complexes. That cooperation, Pentico says, has resulted in the construction of thousands of affordable apartments.
Doing things through voluntary cooperation isn’t good enough for the Legislature. Pentico says AB 1229 would allow local governments to eliminate the imperative that government agencies must provide cost offsets if they’re going to cap rents. It is that demand that has forced local governments to work with apartment builders cooperatively.
AB 1229 “would return us to the days when the power of local government to control rents was unchecked.” That, suggests Pentico, wasn’t as conducive to the creation of affordable housing as has been the 18 years of voluntary cooperation.
In other cases regulation comes from a do-gooder legislator who sees a cause and hopes to capitalize and win more voters in that constant quest for re-election. The objective is to be on the list of those who launched legislative action and impress the masses by proving that you’ve done something.
A recent vacuous legislative regulatory approach was an effort to establish licensing requirements for animal groomers. Someone’s pet was cut during a grooming session. That proposal did not make it to the governor’s desk.
We have two dogs that work to keep our backyard free of cats and skunks. Occasionally we take the dogs to professional groomers, usually because they have encountered a striped rodent. Should one of those groomers hurt either dog we won’t go back. That’s effective regulation.
Government regulatory oversight offers a false sense of security. It gives people the impression they don’t need to look out for themselves because government does it for them.
While some regulation is necessary, it often stifles innovation and competition. It should be embarked upon reluctantly.
Hawkins is retired after 35 years as a construction industry association manager. He was broadcast reporter and news anchor in Denver. As a Navy officer, he saw action in Vietnam in the River Assault Squadrons and is the recipient of a Silver Star and Purple Heart.