Monday, August 10, 2009

Taking Us for a Ride

What happens if you develop a unique business idea and successfully implement it? If you are Erik Ibarra you get a stream of tickets from the city of Houston.

Ibarra owns Rev Houston, a downtown shuttle service that uses electric carts to ferry passengers around the central business district. The service is entirely free, and the company depends on tips for revenue. But the city calls Rev Houston a taxi service, and has repeatedly cited the company for numerous violations of taxi regulations.

Tina Paez, the city's deputy director of administration and regulatory affairs, told the Chronicle:

If they charge a fare or accept a gratuity, they are a vehicle for hire. Even though they don't technically charge, they come under the ordinance.
So, if I take an elderly neighbor to the store each week and she gives me some money for gas and my time, I would be considered a taxi by the city. A voluntary transaction between two individuals should not be the concern of the city.

Among the offenses cited by the city is the absence of a fire extinguisher on the electric vehicles, which carry no combustible liquids. Another offense is the absence of a taxi meter, which is unnecessary because the company doesn't charge a fee. Paez justifies these absurdities in typical fashion:
She said city officials are concerned with the shuttles meeting minimum safety standards, tourists being taken advantage of, and making sure drivers have criminal background checks.
Paez fails to cite a single instance in which a tourist, or anyone for that matter, has been taken advantage of by the company. Rather than address actual instances of fraud or coercion, the city treats Rev Houston as a criminal enterprise for the mere fact of existing. This is simply a perverse twist on the equally perverse concept of original sin.

The city's true motives have come under question, since Ibarra and his brother won a lawsuit against the county in 2008. But whether the city is exacting revenge or not, it is resorting to strong-arm tactics to harass Ibarra for activities that do not violate the rights of anyone.

The city is not alone in its desire to put Ibarra out of business:

Houston Yellow Cab President Raymond Turner has complained to Paez's office, as well as City Council members. It is a matter of fairness, not cost, he said.

“The taxicab industry is highly regulated by cities,” he said. “If they allow these vehicles for hire, it's basically ignoring city ordinance. It's allowing someone to operate a vehicle outside the law.”

Rather than question the entire premise of city regulation, Turner seeks to use those regulations to his advantage. Rather than demand the freedom to operate his business as he deems appropriate, Turner demands that chains be put around the neck of others. The city's taxi regulations are a barrier to entry, and existing companies like Yellow Cab can use those barriers to stifle competition.

Paez argues that Ibarra can simply get a jitney permit and the issue will go away. Ibarra disagrees, pointing out that jitneys operate a set route--set by the city--and his service goes where passengers desire, not to some arbitrary point selected by bureaucrats. Further, the city has never issued a jitney permit.

While taxi regulations are hardly the most important issue facing Houston, the principle underlying them is. Individuals have a moral right to take the actions necessary to sustain and enjoy their lives, so long as they respect the mutual rights of others. Government's sole purpose is the protection of this right.

Government regulations, by their very nature, violate the rights of individuals by mandating their actions. Regulations are pre-emptive, treating certain actions as criminal despite the judgment of the individuals involved. The truth is, if one individual chooses to offer transportation services and another chooses to purchase those services, it is no business of the city.

We don't need city hall telling us who can transport us and who can't. We do need city hall to protect our right to make that decision. And until we can, city hall will continue to take us for a ride down the road to statism.


Rational Education said...

"Outlaw company" the name given by the city to Ibarra's company is in a way like a badge of honor, considering the fact that all other public modes of transportation including the cabs are alive because of the power of govt. guns to keep out competition, where as Rev Houston is engaging in voluntary transactions with those who would like to take its offer to get rides to short distances in downtown Houston -there is no force involved. (I hope you succeed Ibarra I am rooting for your victory).
I wonder if Ibarra has read or heard of Atlas Shrugged -he sure looks like a hero from the book himself.

Brian Phillips said...

I think Rev Houston is a great story--a creative business idea that challenges conventional thinking. And the company is opposed by the thugs in black hats. I too am rooting for Mr. Ibarra.

I know nothing about him, other than the little in the paper. Like every businessman I defend on this blog, I have emailed him.