Perspectives: Organized crime doesn’t like innovation either

OPINION – Innovation is one of the key factors that made America a great nation. If there was a frontier to be tamed or a challenge to be overcome, Americans could be counted on to find the way.

Unfortunately, innovation is being slowly strangled out of existence by the growth of the regulatory state at every level. A perfect example of this can be seen in how authorities in Miami-Dade County are reacting to an innovative approach to transportation.

Capitalizing on smart phone app technology, Lyft was created to allow individuals needing a ride to request to be picked up via their phone. The app tracks the approach of the assigned driver and provides a photo and description of the driver and car so there can be no doubt.

The large pink mustache on the front of the car is also a good indicator that they’re dealing with an official Lyft driver.

All drivers are vetted by the service and must pass DMV and background checks before accepting riders. Lyft drivers use their own vehicles to provide rides for a few hours a week in their spare time. They also carry an additional $1 million liability coverage in addition to their insurance policies.

Those needing a ride are driven to their requested destination and the app automatically bills their account for a “donation” from a pre-stored credit card number. The driver keeps 80% of the donation, which can be adjusted upward or downward depending upon service, and Lyft keeps a 20% commission.

Drivers and passengers rate one another and if the rating is too low, they are never paired up again. A strong indicator that they’re on the right path is that Lyft has received more than $250 million in venture capital funding.

An innovative idea with a free market approach that has caught on in 60 different markets ought to be welcomed with open arms, right? Not so, according to Miami-Dade County officials.

Using undercover code enforcement agents, officials in Florida have begun conducting sting operations and confiscating the vehicles of Lyft drivers. This is done to protect limousine and taxicab companies who pay a great deal of protection money to officials each year in the form of permits, applications, inspections, and fees.

But Lyft drivers are not a fleet of full-time drivers working for flat or metered rates. They are using their own vehicles and technology to bring private individuals together in a mutually agreed upon manner that solves a transportation problem.

The fact that they can do so for roughly 30% less than what most cab fares would cost is a function of the free market working as intended.

Cab and limousine companies complain that they are paying an arm and a leg to officials for the privilege of doing business. Rather than questioning whether this shakedown is a proper function of local government, they want the misery spread more equally. If someone wants to do business on their “turf,” they’d better be willing to pay the racketeers too.

It’s a curious mindset that believes a business can only be legitimate if the state says it is. But this is how many of us have been trained to think.

Joseph Sobran explains why this is a erroneous concept:

“But permission isn’t freedom. The privilege of a subject isn’t the right of a free man. If you can own only what the government permits you to own, then in essence the government owns you. We no longer tell the state what our rights are; it tells us.

Such is the servitude Americans are now accustomed to under an increasingly bureaucratic state.”

When a particularly innovative idea cannot be acted upon without permission being granted in the form of licensing, our freedoms are no longer intact.

When businesses can use armed agents to harass their competitors and maintain their market position, there is no longer an appreciable difference between government and organized crime.

The legitimate areas of responsibility for government in economics include preventing the use of illegal force to compel the sale or purchase of a product and preventing fraud or monopolies. Creating economic crimes where an actual measurable harm has not taken place tends to stifle innovation.

We are not immune from this kind of economic protectionism and barriers to entry here in Southern Utah. Entrepreneurs from taxi drivers to home-based Tupperware dealers have felt the regulatory pinch.

It’s time we found the proper balance between innovation and regulation.

Bryan Hyde is a news commentator and co-host of the Perspectives talk show on Fox News 1450 AM 93.1 FM. The opinions stated in this article are his and not representative of St. George News.

Email: bryanh@stgnews.com

Twitter: @youcancallmebry

Copyright St. George News, SaintGeorgeUtah.com LLC, 2014, all rights reserved.

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11 Comments

  • chris June 9, 2014 at 12:37 pm

    Bryan!!! for perhaps the first time ever, we agree on something!!! One of my kids has been driving with Lyft for a couple months in SLC. He loves it, he can make 100 bucks on a weekend night, when he would be just hanging around at home. He lives quite close to downtown, and most of his riders are going from one restaurant or club to another. The riders love the service because it is quicker, cheaper, and more convenient. My boy loves it because it is interesting meeting new people, and it is easy extra money. I love it because it helps folks who want to go out for the evening, and perhaps drink, do so safely, which in turns keeps the rest of us safe!!

  • Petra June 9, 2014 at 1:24 pm

    Organized like the world dominant church.

    • Alvin June 9, 2014 at 3:25 pm

      Would that be the Catholic church ?

    • Ron June 9, 2014 at 4:40 pm

      Did I miss something here? What does any church have to do with Lyft?

  • Petra June 9, 2014 at 6:10 pm

    Ye wherb I’m from its catlick. But if you call it the why you spell it’s up to u

  • Roy J June 9, 2014 at 7:37 pm

    I think Sobran is partly correct about the national socialist nature of some parts of the US government, pretty much all Western governments, since WWI. Sobran also rightly points out that the problem lies in philosophy, which has been ignored by the Callicles’ of every age and generation. But is it really the case that government taxes, fees, permits, et alia, are in fact the tools of an organized crime syndicate? And further that those who paid to play are also paying to put pressure on their competitors? I don’t think so. I think this has alot more to do with emerging companies that are largely internet driven, still in a dwindling legal limbo, coming into conflict with their ‘brick and mortar’ competition, which is heavily regulated because, well, the taxi service has been around since forever. This is always the case with a new method of business, or a new industry: it cannot be regulated until it has been implemented.

  • Dolly June 9, 2014 at 10:50 pm

    I have a relative who recently found work as a cab driver after 2 years of being unemployed. It’s long hours and since he doesn’t own the cab, he receives about 30% of the meter and tips (if people are kind enough to tip, that is). It’s ok pay, not great and it does vary a great deal from day to day – many days it’s way below minimum wage. It’s terrifying to think that after being unemployed for 2 years his new way of making a meager living will now be threatened by a teenager who has “nothing better to do” in his spare time.

  • Les June 10, 2014 at 8:20 am

    Correct me if I’m wrong, but isn’t this issue a state and local regulation problem, not the US government. I think Florida is a Republican controlled state, but I have no doubt that you can tie this back to Obama. States Rights Baby!!! Maybe we should just get rid of all regulations. Who needs clean water, safe food, safe working conditions, safe transportation, safe financial institutions. If I own a business why shouldn’t I be able to dump toxic chemicals in Zion park. If I have an aircraft repair business why should I have to use qualified mechanics or certified parts. How about interstate trucking, we don’t need no stinking regulations. Why would truckers need sleep, training, proper equipment, secure loads. In fact, why should you have building codes we know no one would take short cuts and put people in danger. It is “We the people” not “We the corporations” and commerce is subject to the people, not the other way around. Free markets work best when properly regulated. Effective regulation should be the goal of all local, state, and federal agencies.

    • Roy J June 10, 2014 at 9:35 am

      You are right about that, LES. This sort of fight has alot to do with which county and state gets to tax an internet service or transaction, or what percentage of the tax/fees/licensure/etc is allotted to each. I was talking to a good friend of mine who is a California tax attorney about a very similar issue a few weeks ago.

    • OBAMAS A COMMIN' TO TAKE THE GUNS June 10, 2014 at 11:24 am

      BIG GUBMUNT = BAD
      OBAMA = EVIL BLACK MAN
      GUBMUNT REGULATIONS = COMMUNISM
      FOX NEWS = GOD’S HONEST TRUTH

      AND THIS ONE JUST FOR FUN:

      LDS CHURCH: shut off your brain. the men in the corporate looking attire have decided. the thinking has been done. the debate is over. its now time to pay, pray, and obey.

  • EL JEFE June 10, 2014 at 9:54 am

    And that is why…..I am El Jefe!

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