Beyond Benign - Local Regulations and Business

govtregs.jpgCedar Falls' code of ordinances has evolved over the decades to continuously refine what an individual or entity (business or otherwise) can and cannot do. At all levels of government, it is rarely reviewed for effectiveness or relevance - especially business regulations.

Code is too often forgotten, blindly accepted, or just ignored. This complacency becomes a malignant cancer. It unconsciously forces conformity while inhibiting innovation. In this writing, I attempt to illustrate the adverse impact of local regs on business and jobs.

LocalRedTape.jpgMany people rally for reducing regulations. Others say cut red tape. Rarely do you hear specifics, because the problem is so immense, yet so granular, that it is difficult to discuss in any way but abstraction. It is like death by a thousand cuts. The ridiculousness can only be described in analogy or anecdotal form. Let's look at our taxi ordinance.

Even as it relates to the good intentions of past councils - to provide safe, clean, qualified vehicle for hire services, the code is out of date and ineffective. It limits new entrants and all but destroys emerging technologies for transportation innovation.

Our code today requires that vehicle-for-hire companies be permitted and licensed to operate in our city with at least three local driver references for good character and sobriety, minimum insurance naming the city as insured, health department inspections, color schemes and/or insignias -- all on a yearly basis. By extension, any taxi or limousine operator in the state would need to be an expert in Cedar Falls code to operate legally. This code seems better fit for the distance-limited horse and buggy. Imagine if every city had similar requirements (actually, most do!!). Would it even be possible that every taxi is in compliance with the very standards we require? Inspection is one time. Vomit or fecal matter could end up on that seat anytime. What are your assurances? There are none, it can't be effectively government controlled.

Second, let's explore how vehicle-for-hire kills innovation. Essentially, any vehicle-for-hire must comply with our regulations. What about Uber or Lyft peer-to-peer ride share services? These disruptive technologies have the power to change point-to-point travel as we know it. But in Cedar Falls, I would bet most of my bitcoins that it is illegal. Regulation can't keep up with technology. This world is increasingly being driven by technological innovation. More often than not, regulation destroys technology benefits. It creates unnecessary barriers of entry protecting entrenched special interests like taxicab operators.

In Cedar Falls, there isn't a huge taxi cab lobby, but we would be mistaken to say there isn't a need for efficient, convenient, affordable transportation. Our recent Route 9 decision is a good example. But what if this government funded transportation could be replaced by technology driven peer-to-peer car share? As it is in Cedar Falls, the possibilities are dead on arrival. As an aside, I'm developing a policy piece to address our middle-market transportation issues. One that considers all forms (ped, bike, bus, automobile, peer-to-peer, car-share, etc.) AND all potential users as integral pieces of this discussion.

The issues surrounding regulation are complex. But the complexity shouldn't be an excuse to avoid the discussion. Bright minds that believe in free markets, self-determination, and personal responsibility may very well have the answer. But if we leave it to complacency, business as we know it, even on the most local level, will cease to innovate, stop creating jobs, and stymie value creation.

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