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NFIB Op-ed: Regulation shouldn't override innovation

Date: April 30, 2014

This op-ed by NFIB/Florida Executive Director Bill Herrle was published in the Tallahassee Democrat on April 30, 2014.

Regulation shouldn't override innovation
Bill Herrle

Florida has made tremendous strides in improving its business climate, so it may come as a surprise when an archaic regulatory structure impedes a business from even opening its doors and jumping into the market.

But local regulations dictating limits for limo operations are doing just that to a company with an innovative and consumer-driven business model.

Uber allows a customer to summon an independently owned and operated limousine and town car via a smartphone app. Well, Uber would allow a customer to do that. But many municipalities don’t.

Limos operate as an oligopoly by way of regulation in many Florida cities, including Miami. Before a very recent embarrassment-induced adjustment down to 20 minutes on the part of the jurisdiction of Miami, the regulations required that a limo could not pick up a customer less than an hour from when it was requested. Additionally, arbitrary price points were dictated for the service, and the number of operators was tightly regulated, necessitating operator licenses to be re-sold on the secondary market for tens of thousands of dollars.

Businesses of the future like Uber are something that old regulations couldn’t have anticipated, but that’s why we need to adapt.

Today, effectiveness is often measured by whether something is bigger, better or quicker, so it might seem disconcerting that some legislators are intent that such counterintuitive and restrictive regulations remain in place.

The committee debate on this has been revealing. Legislators seem unable to comprehend that their regulatory protections may not be needed or welcomed by the public in the economy of the future. The Uber app allows customers to rate drivers after each ride, creating a continuous feedback loop to ensure a quality experience for both rider and driver. When explained this rating mechanism, some legislators were stuck in trenchant disbelief as to how the market could function more effectively than the Miami-Dade County For-Hire Transportation Customer Complaint Form (there is such a thing). The Legislature should have an open mind about new transportation options and develop frameworks that are focused on protecting consumer choice, not limiting competition.

The old way of regulating limos simply isn’t applicable in today’s cities, and only hampers competition. Regulations like the ones preventing Uber from operating in many of Florida’s municipalities not only slow down the economy, but they slow down the citizens, business owners and employees who are eager to use a service like Uber to more effectively navigate through their days. All these regulations do is create a barrier to growth, development and vibrancy in an effort to protect the status quo. We should be encouraging new small businesses to open in any city in Florida, not finding ways to stop new business growth by sticking to the “same old same old.” Free enterprise drives the economy, and we should be doing all we can to encourage it across the state, not make it impossible.

Uber is a great example of the free enterprise system at work, and lawmakers need to find ways to welcome it and all new, innovative, technology-centric businesses. Florida shouldn’t be a place where modern companies face archaic regulatory obstacles. Let’s eliminate artificial barriers and continue to move Florida toward growth and innovation, not back in time.

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About the Author

Bill Herrle
NFIB/Florida Executive Director