1. San Francisco taxi cartel vs. the thriving and popular high-tech, on-demand ride-sharing services, from the SF Chronicle:
The state Public Utilities Commission on Wednesday fined Uber, Lyft and SideCar $20,000 each for illegally operating their high-tech taxi and limousine hailing services without the required permits. The fines come as Uber also responded to a class-action suit that claims the service is unfairly taking away fares from San Francisco taxi drivers.
“This is a matter of public safety,” said Jack Hagan, the commission’s director of consumer protection and safety.
The suit against Uber, filed on behalf of two veteran drivers for Luxor Cabs, says Uber is “creating unfair business competition” by violating the strict state and city regulations that govern taxis and limousines. Uber has also been sued by cab companies in Chicago.
2. From George Will’s latest column on the ongoing case of a Benedictine monastery in Louisiana challenging the state’s “casket cartel.”
In 1914, Louisiana created the State Board of Embalmers and Funeral Directors. Its supposed purpose is to combat “infectious or communicable diseases,” but it has become yet another example of “regulatory capture,” controlled by the funeral industry it ostensibly regulates. Nine of its 10 current members are funeral directors.
In the 1960s, Louisiana made it a crime to sell “funeral merchandise” without a funeral director’s license. To get one, the monks would have to stop being monks: They would have to earn 30 hours of college credit and apprentice for a year at a licensed funeral home to acquire skills they have no intention of using. And their abbey would have to become a “funeral establishment” with a parlor accommodating 30 people and an embalming facility even though they just want to make rectangular boxes, not handle cadavers.
This law is unadulterated rent-seeking by the funeral directors’ casket-selling cartel. The law serves no sanitary purpose: Louisiana does not stipulate casket standards or even require burials to be in caskets. And Louisianans can buy caskets from out of state — from, for example, Amazon.com (it sells everything).
3. From Warren Meyer at the Coyote Blog:
“In legislation that reminds me of stuff from the 1990s when businesses tried to fight Internet-driven disintermediation, Hawaii is proposing to force non-Hawaiians to use a local broker to list their rental properties. Apparently local residents can still list their properties on low-cost Internet sites, but folks on the mainland (also known as “the United States”) must use a high-cost locally licensed broker, who typically charge 50% of rental fees as a commission. These type of commission rates are farcical – they imply that fully half the value of a one-week condominium stay is due to the broker, not the condo itself, its location, etc. The only way brokers can charge these fees is by maintaining a tight cartel enforced by government licensing laws.”
“Any reasonable person will look at this law and immediately know it is about crony protection of local real estate brokers. Of course, that is not what the law says. It is all about ‘consumer protection’”:
The legislature also finds that requiring nonresident owners to employ a licensed professional such as a real estate broker or salesperson or a condominium hotel operator is an important consumer protection measure. Consumers who use real estate companies, real estate brokers, real estate salespersons, or condominium hotel operators for their transient accommodation rental needs can do so with the knowledge that all money generated will flow through a client trust account, the appropriate federal tax form 990s will be generated, and accurate transient accommodations taxes and general excise taxes will be paid. Real estate companies, real estate brokers, real estate salespersons, and condominium hotel operators must comply with specific licensing and bonding requirements, thus offering additional protections for consumers.
Warren then quotes Milton Friedman:
The justification offered [by the industry for restrictions on competition] is always the same: to protect the consumer. However, the reason is demonstrated by observing who lobbies at the state legislature for the imposition or strengthening of licensure. The lobbyists are invariably representatives of the occupation in question rather than of the customers. True enough, plumbers presumably know better than anyone else what their customers need to be protected against. However, it is hard to regard altruistic concern for their customers as the primary motive behind their determined efforts to get legal power to decide who may be a plumber.
Let me add a quote from Bastiat: “Treat all economic questions from the viewpoint of the consumer, for the interests of the consumer are the interests of the human race.”
Bottom Line: From the viewpoint of the consumer, all three examples above are anti-consumer and anti-competitive and serve primarily to further the interests of the protected industry cartels for taxis in SF, caskets in Louisiana and real estate brokers in Hawaii, and certainly don’t protect the interests of consumers in those states.
HT: Morgan Frank for items #1 and #3.