Cambridge Entrepreneur Ready to Fight City HallRegulators Leave Aspiring Nautical Entrepreneur High and DryWEB RELEASE: July 26, 2006
Arlington, Va.—Erroll Tyler—an African-American entrepreneur from Melrose, Mass., who is battling for economic liberty—seeks to show that you can fight City Hall. After two years and two applications, Tyler still does not have the license he needs to start his amphibious vehicle tour service because City officials from Cambridge, Mass., decided that the City does not “need” him. In a sharp break from the American tradition of fair play, Cambridge is using the power of government simply to protect other tour operators from honest competition—hardly a proper use of government power. Not only does this naked protectionism cost the City jobs and drive up prices by reducing competition, it violates Tyler’s constitutional right to earn an honest living in the occupation of his choice without arbitrary government interference. That’s why on July 26, 2006, Tyler joined with the Institute for Justice, a public interest law firm that helps entrepreneurs overcome senseless government regulations, to file a third license application and fight for his economic liberty. If Cambridge does not recognize Tyler’s right to pursue the occupation of his choice, the Institute for Justice will take this case to the courts of law. “Consumers—not city bureaucrats—should decide whether a business is ‘needed,’” said Jeff Rowes, an Institute for Justice staff attorney. “Governments, like Cambridge, need to recognize that economic liberty is as much a part of our Constitution as the right to free speech. The constitutional right to earn an honest living is the basis of our independence as free and responsible members of society. This right is more important than protecting other tour operators from competition.” Tyler said, “I don’t understand why Cambridge officials told me I wasn’t ‘needed’ and why I can’t just have a chance to prove what I can do. My story is about more than just Nautical Tours. It’s also about the rights of entrepreneurs to pursue their dreams.” Even though the only legitimate purpose of government licensing is to protect public health and safety in carefully tailored ways—such as requiring buses, for example, to be insured, well-maintained and operated by a qualified driver—in the transportation industry, an entrepreneur has to do more than satisfy objective criteria like these. To receive a “jitney” license, which is required to pick up and drop off passengers along a fixed route, State law and City ordinances require an entrepreneur to prove that his or her new venture also serves “public convenience and necessity.” Unfortunately for entrepreneurs, a proposed transportation business is only “convenient and necessary” if the entrepreneur can prove to bureaucrats that there is a market for the new business that existing companies cannot satisfy. It is not enough, in other words, for an entrepreneur to show that he or she will provide consumers better service at a better price. He or she has to further show that existing companies cannot meet the demand. Typically, existing companies oppose the issuance of any new jitney license. “This approach turns the ordinary principles of entrepreneurship upside down,” Rowes said. “Instead of consumers and businesspeople deciding whether a new service is needed in a free market, bureaucrats—in close consultation with a start-up business’s would-be competitors—make that decision. In practice, the public convenience and necessity standard is so arbitrary and so hostile to honest entrepreneurship that enterprising citizens are routinely prevented from pursuing their dreams.” The difficulty of getting a jitney license does not affect merely unusual transportation businesses like Nautical Tours. The late Jane Jacobs—recognized worldwide for her expertise in urban design—was dismayed that cities across North America have effectively banned the sort of private jitney buses she used on her many vacations to the Caribbean. In her view, jitney buses were a flexible “ground-up” solution to transportation issues that enabled a community to develop according to its own preferences and economic life. In contrast to this efficient and organic approach, Cambridge and other cities across Massachusetts, as with most of the nation, have adopted a “top-down” framework in which bureaucrats, rather than the marketplace, decide according to their own personal criteria whether a new jitney service is “needed.” “As Tyler’s case illustrates, this ‘top-down’ approach is arbitrary and suppresses the sort of healthy competition that everywhere else in the economy creates jobs and lowers prices for consumers,” said Chip Mellor, president and general counsel of the Institute for Justice. The arbitrary public convenience and necessity standard is not confined to jitneys. It applies in almost every transportation context, including taxis and the transportation of property by motor vehicle. The “top-down” approach is just as pernicious in these contexts as it is with respect to jitneys. In Boston in the late 1980s, for example, one entrepreneur’s effort to get one new taxi medallion issued by the Boston Police Commissioner became a protracted 13-year battle in the Massachusetts courts after existing taxi companies intervened to maintain their stranglehold on the market. Despite overwhelming evidence to the contrary, these companies did everything possible to convince State regulators that “public convenience and necessity” mandated preventing even one more car from taking to the road. Mellor said, “The people of Massachusetts would enjoy more liberty and greater prosperity if, rather than bureaucrats applying an arbitrary standard under pressure from existing companies, entrepreneurs and consumers were the ones deciding whether a particular transportation business is ‘needed.’” |
