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.