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Wilson isn’t alone in maintaining onerous rules for taxicab companies that throttle competition, limit innovation and saddle cabbies with burdensome costs. But following other cities’ lead has taken us down the wrong path.
Blue Star Cab took its fleet off the road late last month and formally notified Wilson officials Wednesday that it had ceased operations. Ronnie Edmundson, the company’s president, blamed city regulations requiring two cabs to be in service or on call 24 hours a day despite a dearth of demand for overnight rides.
“They said we had to have a third shift, but we couldn’t afford it,” Edmundson told The Wilson Times. “And we were paying (drivers) for nothing, so we tried to explain that to them. We wanted to keep it open, but the rules and regulations of what we’ve got to have meant we just couldn’t.”
Blue Star’s closure leaves just one licensed taxi service — Safety Cab Co. — operating in the city of Wilson. A lack of competition may benefit that company and its drivers, but de-facto monopolies are bad for consumers.
Wilson’s code of ordinances devotes an entire chapter and a staggering 31 pages to rules for taxicabs and limousines. Cab companies must obtain a “certificate of public convenience and necessity,” essentially a franchise granted by the city council, in order to operate here.
Alongside some commonsense language requiring cabs to be in good working order, drivers certified and companies insured, there are anticompetitive regulations that set businesses’ operating hours, require city fare approval and limit the number of cabs a company can maintain.
“Municipal ordinances governing taxicab operators are standard practice in cities across the United States,” city spokeswoman Rebecca Agner said. “Taxis are considered part of the public transportation system and municipal regulation helps with standards of uniformity among operators. The city of Wilson, like other cities, regulates taxicab standards and the number of taxicab companies to promote a healthy, safe transportation system.”
Agner’s right — there’s nothing unique or unusual about Wilson’s byzantine bureaucracy where cabs are concerned. New York City is famous for limiting the number of cab companies by issuing taxicab medallions. In order to work in the Big Apple, new firms must buy medallions from existing businesses, and CBS News reported the going rate was as much as $750,000 in 2016.
Rampant overregulation of private taxi services led to the rise of ridesharing apps like Uber and Lyft, which allow ordinary drivers to pick up fares part-time in their personal cars. Smartphones link passengers in need of a ride with motorists willing to ferry them around for a fee.
Ridesharing is now a multibillion-dollar industry that owes much of its success to the stifling rules cities have foisted on professional cabbies. The amateur drivers don’t need a pricey medallion and since the companies that provide them with passengers aren’t technically their employers, many cities find them too slippery to regulate.
The Wilson Times opposes unnecessary government intervention in private business. City officials have a legitimate public safety interest in cabs’ roadworthiness, companies’ liability insurance and drivers’ licensure. But mandating hours of operation, setting prices and limiting the number of cabs on the road fail to serve those purposes.
Around-the-clock service is a convenience that businesses will voluntarily provide if it’s profitable for them to do so. But municipal ordinances don’t outweigh the fundamental law of supply and demand. Forcing cab companies to pay dispatchers and drivers when there are too few passengers to cover their costs is shortsighted.
In a free-market system, businesses compete for customers and adjust their offerings according to demand. Overbearing rules that make it too costly to operate will leave consumers with fewer choices.
Some cities, like Philadelphia, are doubling down on market meddling by enacting stringent rules for ridesharing services. Others, like Miami, are deregulating the taxi industry to foster healthy competition that results in savings and convenience for passengers.
We favor the latter approach, and we urge the Wilson City Council to take a shredder to its voluminous rulebook for cab companies sooner rather than later.
Instead of being one of many U.S. cities that put cabbies in a regulatory chokehold, let’s lead the way in restoring economic freedom to the private transportation industry.