Wednesday, August 22, 2012

Great Moments in Government Regulation: How City Regulations Killed a Dream in Chattanooga

Here's an excerpt from an editorial in today's Chattanooga Times Free Press that presents a case study in how well-intended, but excessive, burdensome, and stifling government regulations can, and did, kill a small business:
When longtime Chattanooga-area resident Christian “Thor” Thoreson and his partner Christina Holmes decided to launch Buzz Chattanooga Pedicabs in February 2011, the business seemed tailor-made for the downtown area.

Thoreson’s pedicabs, which are pedal-driven tricycles with a two-person passenger compartment attached behind the driver, fill an important need for downtown. By offering a cheap and convenient way for people to get around between hotels, tourist attractions, bars and restaurants, Buzz Chattanooga is a boon for tourist and a convenient addition for locals.

The pedicabs prevent drunk driving, free up precious parking spaces and also cut down on auto emissions. The service is inexpensive — it costs passengers only the amount they wish to tip their driver — and it provides well-paying jobs for Buzz Chattanooga drivers. Thoreson estimates his drivers make more than $20 an hour. Revenues from selling ads on the pedicab and a small cut of driver tips fund the business.

The pedicabs seem like a win for everyone. But apparently, city officials don’t see it that way.

After dealing with the frustrating regulations placed on his business, the unwillingness of city leaders to allow him to serve customers on both sides of the river (pedicabs are banned from using the bridges that span the Tennessee River in downtown Chattanooga, including a pedestrian bridge) and difficulties in selling ads on the pedicabs, Thoreson decided yesterday to throw in the towel and close Buzz Chattanooga.

When asked what he’d tell another entrepreneur considering starting a business in Chattanooga, Thoreson replied, “Stay the hell away.”

Thoreson’s story is the hidden side of regulations that the city council and other bureaucrats rarely consider in their absurd exercises in trying to keep people safe and micromanage businesses. Too often, regulations stifle entrepreneurs’ ability to innovate, and prevent them from improving their businesses, serving more customers and, ultimately, making Chattanooga a better place.
To paraphrase President Obama:

Look, if you’ve been unsuccessful, you didn’t get there on your own. If you were unsuccessful at opening or operating a small business, some government official along the line probably contributed to your failure.  There was an overzealous civil servant somewhere who might have stood in your way with unreasonable regulations that are part of our American system of anti-business red tape that allowed you to not thrive.  Taxpayers invested in roads and bridges, but you might have faced city council members who wouldn’t allow you to use them.  If you’ve been forced to close a business – it’s often the case that you didn’t do that on your own.  Somebody else made that business closing happen or prevented it from opening in the first place. You can thank the bureaucratic tyrants of the nanny state.

13 Comments:

At 8/22/2012 2:08 PM, Blogger Ron H. said...

"To paraphrase President Obama:

Look, if you’ve been unsuccessful, you didn’t get there on your own...
"

*like*

 
At 8/22/2012 3:50 PM, Blogger Buddy R Pacifico said...

The "paraphrase Obama" paragraph is great.

Another *like*.

 
At 8/22/2012 4:38 PM, Blogger Hydra said...

More or less the same thng happened to pedicabs in DC, as I recall.

 
At 8/22/2012 5:28 PM, Blogger Michael Wengler said...

What can be more satisfying than to have somebody else to blame when you fail? Sort of the emotional version of the "Greenspan Put."

 
At 8/22/2012 9:31 PM, Blogger sethstorm said...

"Stay the hell away"
The only question that deserves that answer is "Should I consult this person or not?". He is not some idol to be worshiped.

 
At 8/22/2012 9:50 PM, Blogger Eric H said...

The Free Press' editor is Drew Johnson as of last June and, how do I put this, he's a polar opposite of what the city folks there are used to in the editorial section. Just take a look at the comments. He drives them nuts. Drew founded the Tennessee Center for Policy Research, which you may remember as the group that outed Algore for using 20x the energy of the typical home at his Nashville address (1 of several) while he was out promoting hockey stick graphs.

 
At 8/23/2012 12:10 AM, Blogger Hydra said...

the group that outed Algore for using 20x the energy of the typical home at his Nashville address

================================

Yeah, but the others woren't running a pot greenhouse. It takes a lot of energy to be creative.

 
At 8/23/2012 12:11 AM, Blogger Hydra said...

Parapharasing Obama is misquotig Obama, and it is just as tiresome as those who misquote Romney.

 
At 8/23/2012 2:37 AM, Blogger Ron H. said...

"Parapharasing Obama is misquotig Obama, and it is just as tiresome as those who misquote Romney."

Ah! A nerve has been struck.

"Don't you talk no trash about my boyfriend."

 
At 8/23/2012 7:34 AM, Blogger phoneranger said...

Yup Chattanooga has been a hellhole of socialism ever since Bob Corker (Marxist-Leninist) was mayor.

 
At 8/23/2012 11:37 AM, Blogger Eric H said...

Drew did a pretty good takedown of our other Senator Alexander(R-INO)last month. I am sure one for Bailout Bob must be in the works, but there is just so much material to choose from...it may have to become a regular series.

 
At 9/02/2012 8:50 PM, Blogger Pr1nc3_Ch4rm said...

Pedicabs are operating in DC, so apparently they figured it out.

 
At 9/02/2012 8:51 PM, Blogger Pr1nc3_Ch4rm said...

So, if my business succeeds, I BUILT THAT; but, if my business fails, then that's the government's fault. What happened to taking responsibility for one's failures?

What about this creative destruction I hear valorized?

Also, in the story about the pedicab business, the owner of the business was a rent-seeker (seeking access to government maintained bridges that apparently weren't designed with his business in mind). Ultimately, the story illustrates the opposite of what the author is trying to prove: that government involvement and subsidization (like roads) are necessary for businesses to move forward. If not, then why didn't Mr. pedicab simply build his own bridge?

 

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