Competition, low prices make the wheels fall off
FOR IMMEDIATE RELEASE DATED JUNE 4, 2001
THE LIBERTARIAN, By Vin Suprynowicz
Why we need protection rackets
Competition, low prices make the wheels fall off
Clark Neily, staff attorney for the Washington-based law firm the Institute for Justice, was in Carson City last week, trying to drum up some opposition in the closing days of this year's Nevada legislative session to Senate Bill 576, a lengthy, 10-page treatise expanding regulation of limousines in Nevada to make the system for those vehicles nearly as onerous as for taxicabs.
What Mr. Neily most objects to is Section 22 of this new bill, which sets a system for "allocating" licenses for additional limousines. Mr. Neily characterizes this as setting an arbitrary cap on the number of limousines, restricting new "allocations" to existing firms and shutting out new competitors. This, in his view, would amount to an unconstitutional, legislative override of a partial court victory which his property-rights law firm won against Nevada's Transportation Services Authority (which regulates limos in Clark County) just this month.
TSA board member Paul Christensen and the legislative sponsors all deny that's the thrust of the bill.
"There will be very specific language that new entrants will need to be considered for allocations ... we did specifically put that in the amendment," Assemblywoman Vonne Chowning told me Friday night.
Earlier, I'd called state Sen. Bill O'Donnell, from whose committee this bill emerged in the first place. Sen. O'Donnell politely tried twice to return my calls Thursday, leaving voice mail messages. His second recorded message runs as follows:
"Hey Vin, this is Bill O'Donnell again; I'm sitting on the floor of the Senate, we've got a little break here, so I thought I'd give you a call. Give me a call at 340-XXXX."
Sen. O'Donnell then appears to put his phone down on his desk, with the line still connected.
"Um, he's going to talk to me about 576."
Another voice replies, unintelligibly.
"I know, but they're talking about the limousine bill and this guy is going to do an editorial on this limousine bill; I need some language for this guy to be able to communicate my position in terms of why we need to limit the number of limousines and allocate them.
"And the reason I'm going to give is because transportation is a regulated business, and the reason why it's regulated is that it deals with the general public's health and welfare in that, you have to be able to transport people safely from one point to another. And in years gone by I have lived through the taxi wars, where people were pulled, patrons were pulled out of their taxicabs because other taxicabs were vying for their fare, and because they didn't get their fare, they were in competition, the competition was so high, and so critical that they would literally fight over the patrons, the fares, and we don't need to go back there.
"And the other reason is, when you have a proliferation of transportation vehicles on the city streets the profit margins go down, and it's a purely economic situation in that as the profit margins go down, as the more limousines and taxicabs get put on the streets. When the profit margins go down the first place these guys cut is in maintenance. And about 12 years ago, or 14 years ago we had a situation where cabs were not being maintained, we had wheels falling off, and putting the public at risk. And the reason why they do that is because they can't make enough money to maintain the vehicles. So that's another reason why we have an allocation process and a limitation on the number of vehicles. ...
"There's also language in the bill that allows new companies to come on board. This is not a pure -- now tell me if I'm wrong here, or tell me if -- it's not a pure competitive market, and the reason why it's not a pure competitive market is because there's public safety involved. ...
"Now you can argue all you want to about somebody's ability to go out and get a limousine and go out and compete in the market and if their fares are lower than anybody else's then they should be allowed to take passengers. Well that may all be well and good if you're in a different kind of industry, but in the transportation industry safety is a very important component of transportation. ... Is there anything else I should add?
"Is this for a radio talk show?"
"No, it's for an editorial. ..."
I'd say Sen. O'Donnell has the argument down pretty well. Of course, since food storage and preparation are also "vital to the public health and safety," I'll be awaiting his next bill, limiting the number of licenses to be granted for fried chicken and pizza restaurants -- oh, and supermarkets -- in Nevada, and setting up a new state agency to "allocate" them.
Why? Because when you have a proliferation of supermarkets and restaurants in a state the profit margins go down, and it's a purely economic situation in that as the profit margins go down, the first place these guys cut is in cleanliness, healthfulness, and throwing out the bad food at the end of the day instead of heating up the spoiled leftovers, throwing on a sprig of fresh parsley, and serving the rancid remains to unsuspecting customers again tomorrow.
Now we can argue all we want to about somebody's ability to go out and get a supermarket or an empty restaurant premises and go out and compete in the market and if their prices are lower than anybody else's then they should be allowed to sell groceries or serve food to diners. Well that may all be well and good if you're in a different kind of industry, but in the food industry health and safety are very important.
Aren't they, Sen. O'Donnell?
Vin Suprynowicz is assistant editorial page editor of the Las Vegas Review-Journal. His book, "Send in the Waco Killers: Essays on the Freedom Movement, 1993-1998," is available at 1-800-244-2224.
Vin Suprynowicz, vin@lvrj.com
"When great changes occur in history, when great principles are involved, as a rule the majority are wrong. The minority are right." -- Eugene V. Debs (1855-1926)
"The whole aim of practical politics is to keep the populace alarmed -- and thus clamorous to be led to safety -- by menacing it with an endless series of hobgoblins, all of them imaginary." -- H.L. Mencken
