Wednesday, December 9, 2009

Why I Can't Operate a Taxi in Houston

During this era of job losses and exorbitant government spending to "create" jobs, it is interesting to note the lengths to which government goes to prevent job creation. This is worse than just another example government hypocrisy--it harms consumers, discourages entrepreneurial activity, and destroys lives. Consider Houston's taxicab regulations as one example.

Like most cities, Houston regulates taxicabs. In order to operate a cab in Houston, you must first secure the city's approval. In order to obtain that approval, you must meet a litany of criteria. From the Houston City Code:
Sec. 46-18. General prerequisites to putting vehicle into service.
(b)The director [of the department that enforces the ordinance] shall not authorize a vehicle to initially be placed into service unless it is equipped with an air conditioning system that was factory-installed by the manufacturer and has sufficient interior passenger space to qualify in the United States Environmental Protection Agency's annual fuel economy guide as a mid-size car, a large car, a mid-size station wagon, a large station wagon or a van, passenger type, provided that the director may also allow vehicles classified for purposes of the fuel economy guide as special passenger vehicles if the vehicle has passenger seating and space accommodations at least equivalent to those of a vehicle rated as a mid-size car.
In other words, only specific types of vehicles are eligible to be used as cabs. The fact that a wide range of vehicles are used on Houston's streets, and are perfectly capable of transporting individuals is irrelevant. City bureaucrats have decreed that certain vehicles are illegal as cabs. But it is not merely the type of vehicle that matters, it is also the color:
Sec. 46-22. Vehicle color scheme.
(a) No driver or permittee shall drive or cause to be driven any taxicab in the city until the permittee has filed with the director, for approval, the color scheme that he proposes to use under his ownership or radio service.
The alleged reason for controlling color schemes is to prevent confusion. Supposedly, if "Liberty Cab" and "Slavery Cab" both have yellow cabs, consumers will not be able to tell them apart. Apparently, the city believes that users of cab services are unable to read the name of the cab company on the side of the vehicle and cab owners are unable to do anything to distinguish their vehicles from competitors.

The meddling goes even further. Not only do the colors of the vehicle require city approval, the city wants to make sure that potential cab customers can tell the difference between a cab that is available for hire, and one that is not:
Sec. 46-24. Stool light.
No permittee or driver shall operate or cause to be operated any taxicab within the city unless it is equipped with a stool light that is illuminated when the taxicab is vacant and available for hire. The stool light shall be controlled by the taximeter. When the taximeter is in the recording position, the stool light shall be off, and when the taximeter is not recording, the stool light shall be on and shall illuminate a "vacant" sign contained thereon.
If all of this strikes you as incredibly patronizing on the part of the city, you would be right. Apparently, the city thinks that cab owners are incapable of properly indicating to potential customers that they are operating a cab for hire. Apparently, the city thinks that consumers can't tell the difference between a cab for hire, and any other vehicle on the road.

On a typical day, I do business with many different companies. I don't need the city telling me how to recognize the service or products they offer. And I seriously doubt that they need the city telling them how to advertise their products or services. Indeed, as a small business owner, I spend a great deal of time trying to determine the best way to advertise my services, and the last thing I need is some government bureaucrat telling me what colors or lights to use.

When we consider the fact that the city has been on a decades long crusade to wipe out certain forms of advertising, such as billboards and "attention-getting devices", this hypocrisy reaches levels that no satirist could portray.

While telling taxi owners what they must do, the ordinance also tells them what they can't do:
Sec. 46-40. Preferences and soliciting of business prohibited.
(a) It shall be unlawful for any person to seek or solicit a passenger or passengers for any vehicle for hire, whether or not the vehicle is identified as a taxicab, at, in or near any passenger depot, hotel, airport, ship or ferry landing, bus stop or station, or upon any sidewalk or street or any other place in the city. It shall be unlawful for any person to call out "taxicab," "limousine," "auto for hire," "carriage," "bus," "baggage," "hotel," or any other words or gestures that could be construed as soliciting a passenger for hire. Violators of this section, upon conviction, shall be fined not less than $50.00 nor more than $500.00.
It is literally a criminal act to call out "hotel" in front of a hotel in Houston if it "could be construed as soliciting a passenger for hire." What exactly "could be construed" means is anyone's guess. So I would suggest that if you are in Houston, do not shout out "ship" if you happen to be at, in, or near a ship. Do not call out "bus stop" if you happen to be at, in, or near a bus stop. In fact, just to be safe, do not identify any place that you are at, in, or near if others might hear you. Doing so might make you a criminal.

Lest you think all of the provisions in the ordinance border on lunacy, city officials come to our rescue:
Sec. 46-43. Passenger comfort; courtesy.
(3) Create by chemical means any noxious and unreasonable odor...
I have lived in Houston for nearly thirty years, and I have hired a cab a grand total of one time. But it was a great relief that the cab driver was not conducting chemistry experiments in the front seat. And I'm even happier to know that city officials anticipated such an egregious affront and prevented such from ever occurring so that I did not have to exercise any judgment when deciding whether to get into the vehicle or not.

What does it really take to operate a taxicab? A running vehicle and a reasonable knowledge of the city pretty much covers it. Let's say that I live in a neighborhood with a large number of individuals without a car or who are unable to drive. Let's say that I decide that I will take them to the grocery store, the doctor, the library, or any place else they desire to go. Let's say that I want to be paid for my time, gas, and wear and tear on my vehicle. Let's say that I offer this service to my neighbors, and they voluntarily agree to my terms. They are happy with the flexibility and prices I offer, and I am happy to make some extra money. And the city of Houston would declare me a criminal because it hasn't approved my vehicle, my colors, nor awarded me permission to do so.

If that isn't a gross injustice, nothing is. Nobody would be harmed by my offer or my neighbor's acceptance. Each party is acting according to his own judgment in the pursuit of his own self-interest. Yet the city would want to fine me for violating its rules. Such is the nature of government regulations--they treat all individuals as potential criminals. And unless I follow their rules, no matter how arbitrary, I will in fact be a criminal.


Rational Education said...


only about a few years ago in Bombay an entreprenerial taxicab company Meru was founded and quickly became a huge favorite of many in the city for the better service, comfort and the convenience of a well maintained fleet it afforded commuters at the similar price as the unionized taxicabs. Among the many cab drivers it affords jobs to become self supporting, I have heard it has afforded jobs to many very personable, young, bright, well spoken students who desperately need the funds to support their education by driving Meru cabs part time (of course that is not the reason the company has a moral right to its existence). The company continues to face battles from the taxi unions in the city who consider it their priviledged right to have only their members drive on the streets of Bombay. There are permits in place to drive a black and yellow cab, that I will not be surprised kicks back protection money to union leaders for getting the "lottery" of the cab permit which would sell at premiums!
I am not sure how Meru circumvented the entire permit deal, but I hugely admire the founders.
This is another example of how unions that use political force to "protect" market share might actually work to the detriment of those members who think that the union will protect them from reality and competition forever.

Brian Phillips said...

Thanks for the link.

I suspect the established cab companies in Houston have given their support to the existing regulations, though I can't prove it. But often existing companies support government regulations to prevent competition. The victims are those who don't have the political connections, as well as consumers.

Rational Education said...

the tragedy is that there really are no winners here, because the small short term advnatage anyone may get through the use of political force from being part of a political group are suicidal and self-destructive. While he may gain advantage on his little 2x2 turf as a producer, he loses out as a consumer and the quality and standard in many other aspects of his life, because of the very same political principle of use of force used by his group that he has chosen to accept is also used by thousands of other groups -to me that is an advantage then that is too expensive by far even for the group members.
Another ugly aspect of this is the psyco-epistemological damage that is done by accepting the premise that human life is about eat or be eaten, that there is a limited pie (or piece of meat) out there which you fight over like hyenas if you want to survive. What a corrupted and damaging sense of life.

Brian Phillips said...

I think that that is an often overlooked aspect of altruism--it poses the false alternative of sacrificing yourself or sacrificing others. Until Rand, nobody thought to question the entire notion of sacrifice.

C. August said...

Brian, thanks for this interesting take on Houston's cab issues and the meddling of government regulation in the market. I'm particularly interested because I wrote about the medallion system in Boston a year and a half ago. You and your readers might find the comparison worth checking about.

Boston's Medallion Morass

Brian Phillips said...

C. August,
Good article. As you point out, those with political power make it very difficult for decent, hard working people to get ahead. And it often puts them in the position of breaking the law to make a few extra bucks. Of course, the politicians and bureaucrats will tell them that it is for their own good.