From coast to coast, copious amounts of regulation and taxes have been dumped on the limousine industry in the name of safety and fairness.  With shrinking revenues, limo operators are hurting.

Unfortunately, so are local and state governments.  This means the pain will continue.  Instead of digging in and cutting spending, governments will continue to exact their toll on limo operators.  It wouldn’t be so bad if the bureaucrats cleaned the puke out of the limos, but they contribute nothing but headaches.

Don’t We Need Regulation?

No.  Regulation actually breeds illegal operators and creates a sub-market for cheap limos.   The free market is a superior and efficient regulator.

Although regulation intends to create a safe market, it frequently fails.  A recent report from foxtoledo.com clarifies the problem.

Doug Ramsey, owner of Limo Toledo, said abuse of the [limo] code runs rampant through the city’s limousine companies. Even worse, he said, Toledo loses out by not enforcing its own laws.

“Half the companies in Toledo are probably illegal,” Ramsey said. “If the city wants to make money on issuing tickets, they can make tons of money ticketing these companies. The city and state need to step up and do their job.”

Limo regulations are tough to enforce.  Companies are mobile and can easily evade inspections.  Even when illegal limo companies are caught red-handed, they simply reincorporate and start over.

Within this environment, regulatory fees simply become a tax on honest operators.  This tax is then passed on to consumers and a black market for cheap limo services is created.  It’s a lose-lose situation for everyone.

It’s Not About Fairness

Most regulations are cloaked in fairness, but they’re typically intended to protect entrenched operators.  The Las Vegas market exemplifies this problem.  In order for a new operator to enter the market, they must gain approval from established limousine companies and prove their worthiness.  Sounds fair, eh comrade?

Another example of ridiculous regulation exists in Portland.  A new law was recently enacted to protect the taxi barons.  According to a report in Oregon Live,

Limousines must offer prearranged service. They can provide “on demand” service in direct competition with taxis only if they have a contract with TriMet, the Port of Portland, a major hotel or airline company, and pay an annual license fee of $2,500 for the first vehicle and $1,000 for each additional vehicle. They must charge a minimum $50 for a ride from the airport to downtown.

Leonard said that’s designed to thwart the practice of limousines “poaching” taxi passengers from hotels. Hotels will pay a $500 fine for allowing a guest to obtain limousine service without the required one-hour reservation.

It’s a shame hotels guests in Portland no longer have the “luxury” of last minute ground transportation.  The only people who benefit are the taxi barons and bureaucrats.  These regulations do nothing but degrade service and stifle competition.

Time To Act

The time has come to deregulate the industry.  Illegal operators are nothing but straw men.   The real problem is the regulatory environment that creates them.

At one time it could have been argued customers had no means to investigate operators and regulation was necessary, but the Internet has changed everything.  Review sites like Yelp, Citysearch, and limos.com create a digital track record and puts the bad guys out of business.  The free market works perfectly.

To quote Ronald Reagan , “The most terrifying words in the English language are: I’m from the government and I’m here to help.”

Regulation is nothing more than a means for entrenched taxi barons to protect their markets and government bureaucrats to collect more taxes.  It’s un-American and unfair.  It’s time for government to get out of the limousine business.