Sunday, November 3, 2013

Will Nashville allow transportation innovation? Ride app service Uber wants to enter Nashville Market.

Uber is a service that operates in several American cities and cities in foreign countries that uses a smartphone app to connect providers of transportation with customers. As it stands now, they cannot operate in Nashville.

Nashville is one of the most restrictive, anti-free market, anti-transportation innovation cites in the world. Paris, San Fransisco and New York City are more pro-free enterprise than Nashville.  Nashville's view of transportation regulation seems to be to protect the luxury limo companies from competition and to protect existing taxi companies from competition and the public be damned. While most cities have a maximum fare that limousines can charge, Nashville is only one of seven cities in America that have a minimum fee that can be charged.

In today's Tennessee Michael case writes, "A controversial Metro ordinance requiring a $45 minimum fee for rides in vehicles for hire has kept San Francisco-based Uber, which has become a fixture in big cities ranging from New York to Charlotte, N.C., out of Music City."

With the opening of the humongous Music City Center however, Nashville's powerful may be realizing that their anti-competitive and anti-innovation policies cannot provide the services necessary to meet the needs of conventioneers. The new convention center is expected to host a 5000-plus people convention about every eleven days. These people will need a lot more transportation than is currently available. Also, many of these people will be from other cities that have Uber or similar services or they will have done business or attended conventions in cites with these type services. They will be dismayed to find that these services are not available in Nashville. For all of our new "it" city luster. we will still leave an impression that we are a backwater Podunk.

Cass writes, "Paul Kuhn, a retired investment adviser in Nashville, swears by the simplicity and security of Uber, which he has used frequently in Chicago, New York, San Francisco and Paris." People like Paul Kuhn are going to want that service in Nashville.

It looks like Mayor Dean is on board with changing the law to welcome Uber. Ouoted in the story is Dean spokeswoman Bonna Johnson

It’s important that Nashville offers the most up-to-date transit options as the city becomes an even greater destination for businesses, conventions and tourist travelers and to improve services to residents. In most major cities, the marketplace offers consumers an array of convenient choices, and Mayor Dean is well aware that there is interest from both consumers and transportation suppliers in having a variety of alternatives available in our city.

How did we get in this position of being one of the most protectionist, anti-market cities in America? In Nashville about 2007 or so, an innovative service appeared that offered a service that was somewhat of a hybrid between a taxi and a limousine. The vehicles were usually black sedans, driven by neat uniformed drivers. The cars were luxury and clean without being  ostentatious and they were cheaper than a limo and much nicer than a taxi. These black sedans were cutting into the business of the established luxury limousine companies.

In June 2010 the Nashville Metropolitan City Council passed legislation raising the city's minimum fee for limo and sedan rentals, bumping it from $25 to $45. Drivers were prohibited by law from charging less. Other new regulations forbid limo companies from using leased vehicles, required cars to be dispatched only from the place of business, compelled companies to wait 15 minutes before picking up a client, permitted only one customer per hour, banned parking in front of hotels and bars to wait for customers, required companies to replace all sedans and SUVs over seven-years-old and all limos 10-years-old and older and prohibited vehicles older than five years from entering into service.

Like most bills before the Metro Council, this one passed unanimously. Even the council members who we think of as conservative, like Robert Duvall and Duane Dominy and a handful of other "conservatives" supported the bill. Since then however, Robert Duvall has redeemed himself by advocating for repeal.

There were a couple attempts to repeal the price fixing bill but they failed. The most recent attempt was in January 2012 and was led by Council Member Davette Blalock. That bill was deferred indefinitely when a pre-vote head count revealed their was not enough votes to pass it. Many of those who had previously voted for the price-fixing bill were prepared to support the repeal but there not enough votes to pass it.  Again, it was disappointing to see who some of those were who lined up against it. One of the lead opponents was Councilman Charlie Tygert who is considered a conservative on the Council.

This story of Metro's struggle to squash competition and protect the well-connected has had many chapters, including transportation inspectors impersonating police officers to harass "black sedan" drivers, a court case where the Institute for Justice took on the city but lost,  champions for civil rights and immigrant rights joining with advocates of free markets and small government to advocate for greater competition, and denunciation of Nashville's policy by commentator such as George Will and John Stossel.

Now with Dean on board, apparently, and with the Chamber of Commerce realizing we need more transportation and transportation options, maybe Nashville can stop being one of the most protectionist, anti-free market cities in America. If the council won't oppose price fixing on principle because it the right thing to do, maybe they will do it because Mayor Dean and the powerful realize it is hurting the city and we need markets. Maybe.

For background on Nashville's anti-competitive legislation and price-fixing policies,  follow this link: Limo price fixing.

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