The life of a government regulation typically follows the same path: A business becomes popular with masses of people, the government finds a reason that the new business somehow poses a threat to those same people and therefore decides to regulate it, the business argues vociferously against the new regulatory barriers, and then slowly, over time, the now-mature business comes to love the regulations it once fought against.
The reason for the change of heart is simple – the regulations make it much more expensive for the next generation of new, innovative businesses to enter the fray and take market share. In that sense, regulations are the enemy of progress and a friend of the status quo.
But the status quo is no friend of Republicans, a party that seeks to unleash entrepreneurs and innovators to carry us toward a more prosperous future. The party’s name is cropping up in every debate over new “sharing economy” companies like AirBnB, Uber and DogVacay, but in reality the issue is much broader than any one company or even any one economic trend. Instead, the party succeeds because its message is timeless: Republicans support an organic free market.
Democrats, on the other hand, tend to lurch from trend-to-trend, desperate to regulate something they don’t understand only to figure it out well after the next big idea has already emerged. They are vociferous defenders of the status quo, hoping upon hope that economic progress will stop long enough for government bureaucrats to get their footing. And when they finally realize that the future waits for no man, they do their best to slam the brakes on innovation.
For examples just look at what is happening in New York and San Francisco, two bastions of liberal thought and governance. First, the New York Daily News reports:
Mayor de Blasio is escalating his war on a user-friendly transportation company whose dramatic success is upending a yellow-cab industry that has long been his close political ally. . .
While getting hit with TV ads featuring Uber drivers who paint the mayor as out to destroy 10,000 jobs, he’s engaged in a protectionist crusade for an entrenched industry, absurdly claiming to stand for the thousands of New York passengers and drivers who have flocked to Uber.
De Blasio aims to ram through the Council legislation that would essentially freeze the growth of for-hire vehicles — especially Uber, whose customers summon cars by clicking a smartphone app.
Disingenuously, fans of the bill claim the cap is necessary to conduct a study. Capping the growth of a company with 20,278 cars among 750,000 that enter Manhattan south of 60th St. daily is nuts.
The real issue isn’t about Uber so much as it is about Uber’s impact on the powerful constituency of taxi cab companies and their drivers. The cab companies have carved out a remarkably profitable niche, which they’ve maintained in no small part be erecting ridiculous regulatory barriers.
The worst example is taxi medallions, which are pointless, palm-sized metal discs attached to the hood of a car that magically make the vehicle capable of ferrying citizens from Point A to Point B.The Washington Post recently noted that medallions go for more than $1 million in New York, $700,000 in Boston, and $400,000 in Philadelphia. Is it any wonder then why a taxi ride costs so much?
The situation in San Francisco is similarly infuriating. The Christian Science Monitor reports:
“The city of San Francisco is cracking down on AirBnB landlords with a new short-term rentals department.
Mayor Ed Lee was scheduled to announce the brand new Office of Short Term Rental Administration and Enforcement on Thursday, the San Francisco Chronicle reports. The team of six will be in charge of handling the registration of landlords and investigating violations.
. . . Under the new law, hosts must be permanent residents and are required to obtain a business license, register with the Planning Department, pay a hotel tax, and occupy the property when not renting it out for at least 60 consecutive days. They are also required to keep rental records to show they aren’t violating any rules.
Proponents of the measure argue that AirBnB is diminishing the affordable housing stock. That’s a laughable argument given that San Francisco has a long history of stifling the growth of housing construction through regulatory barriers and a notorious stinginess with building permits. The real issue is the Hotel and Lodging Association, which, according to Mashable are “flooding elections with cash, lobbying, and, at times, even manufacturing what looks like grassroots support.”
As these examples show, entrenched businesses are often enemies of progress. And they’ve found a strong ally in the Democratic Party. Now, it will be up to the GOP to not only unleash the future, but also to show the next generation of voters just how important that message is.