How Big Car Services Use Legislation to Drive Over Competition

by J. L. Green, December 8, 2011, The Huffington Post

NASHVILLE, Tenn.-- 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, require cars to be dispatched only from the place of business, compel companies to wait 15 minutes before picking up a client, and ban parking in front of hotels and bars to wait for customers. More laws that take effect in January 2012 would also require companies to replace all sedans and SUVs over seven-years-old, and all limos 10-years-old and older. Vehicles older than five years cannot enter into service.

Passed under the guise of consumer protection, the net effect is to give large, existing car companies (also known as livery services) a huge advantage over smaller companies, and to effectively prevent any new companies from entering the market. Prior to the new laws, Tennesseans could purchase transportation from downtown Nashville to the airport in a limo or sedan for the same price as an average taxi ride. Nashville residents and visitors will now pay almost double for the same service. (link)

My Comments

This is an excellent article explaining how Nashville came to adopt price fixing for limousine services. Please read the whole article.

According to this story, the bill that fixed prices was actually written by Matthew Yorke, president of the Tennessee Livery Association and owner of Signature Transportation. In addition to Matthew Yorke, another player in the push to fix prices was Opryland Hotel which operates their own limousine service and the Nashville Chamber of Commerce.


In this article, Green says of the move to fix prices that, "It's a case of regulations actually costing jobs and driving up costs, just as Republicans charge they always do. But this time, the regulations are being pushed by the GOP's so-called "job creators," the new name given to big business."  I think Green is right. Many in big business do not really believe in free enterprise. They are not above using government to get or maintain an economic advantage. Much of the regulation of business is simply an effort to suppress competition and has little to do with health and safety. I also would not be surprised if the folks at Signature Limousine and Opryland and the Chamber are not indeed Republicans. 

Too often, Republicans and Democrats are indistinguishable when it come to who is willing to use government power to get an economic advantage. Party labels are often nothing but names used to identify members of your team. Many seem to view politics as a chance to help your friends and Republicans help other Republicans and Democrats help other Democrats. Republicans are often just as guilty as Democrats of using regulation or eminent domain or awarding of contracts to benefit their business or institution or friends. 

When I first posted on this topic some moths ago, an anonymous person left a comment that said, "HAHA! A disgruntled Republican! Step into Mr. Bokhari's office and you will see a life size photo of President Obama."

Mr. Bokhari, who I have never met, is an owner of an economy limousine service and leader in the effort to overturn Nashville's limousine price fixing. I have no idea if it is true or not that he has a life size photo of President Obama in his office but it is irrelevant. I take position on issues because of my values not because the affected party is a Democrat or a Republican.

While the article tells how the price fixing bill was pushed through Council, the article credits Councilman Eric Crafton and Councilman Sean McGuire for last year trying unsuccessfully to repeal the price fixing bill. The story does not report that the issue is now back on the Metro Council agenda. Sponsored by Council member Blalock, Council bill BL2011-49 would repeal the limo price fixing bill and establish new limousine regulations devoid of the price fixing feature.

Last Tuesday the Council voted to defer BL2011-49. I don't know what is going on behind the scene with this bill. I don't know if the "fat cats" at Opryland and the Chamber who can make nice campaign contributions are twisting arms or not but it is not a good sign when a bill is deferred. If will be a shame if Council fails to undo their imposition of limousine price fixing. I was very disappointing that in June 2010 when Council imposed limousine price fixing that not a single member of the Council who identify themselves as conservative or Republican opposed it. I still wonder how it can happen that not a single member of the council looked at the bill and said, price fixing is contrary to my principles.

Perhaps many on the Council did not really know that the regulations they were adopting was price fixing. If an individual Council member was not on one of the committees that considered the bill, they may very well not have known the impact of the bill. Perhaps also they did not know their was any opposition to the bill. This time however, there are no excuses.

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Highlights of the December 6th Metro Council Meeting, Another update.

 'Deals for Meals', Titans Stadium Improvements, Privatizing the Tow-in Lot

A video of the December 6th Council meeting is below.



The council voted 33-3 for a bond issue to improve the Titans stadium. Councilmen Phil Claiborne and Duane Dominy questioned the terms of the deal during a brief debate. They argued that the 20-25 year repayment schedule on the bonds extends beyond the useful life of the improvements and also the term of the Titans’ current lease, which expires in 2028. (see video starting at 22:50)  Not stating her reason, Council Member Evans, who is a municipal bond expert and no doubt has valuable insight asked to be recorded as abstaining. Councilman Dominy made the point that there are $1.1 billion dollars in outstanding bonds collateralized by this same source of non-tax revenue. He urged the bill be defeated and a new bond package be negotiated providing better terms to the city. The three council members voting against the bill were Clairborne, Dominy, and Tenpenny.

The bill to require quarterly storm water reports was deferred indefinitely by the sponsor saying he would continue to work on an improved reporting procedure, perhaps pursuing a requirement for semi-annual report. (see video at 34:50) I think Councilman Standley was correct in wanting quarterly reports but apparently he just did not have the votes. The Council must exercise a lot of oversight or the stormwater program will turn into a means for the Mayor to reward friends and punish enemies and we will also see a lot of waste in the program.

The bill to undo limo price-fixing was deferred one meeting.


The bill to allow recreational athletic fields to be constructed in the floodway with appropriate safeguards passed 31-6.

The council passed on third reading a bill that would return some sanity to the rules regarding someone buying a meal for a council member.  As passed, now an individual may spend up to $25 a year on meals for a council member before that council member has violated the law by accepting the meals. As it was, a council member could not consume cookies and coffee at a neighborhood meeting.The bill passed without discussion on a voice vote.

The bill which would privatize the tow-in lot  (see video at 52:34) was amended  and passed 35-2. The two "no" votes were by Stanley and Duvall. I am surprised by Duvall's "no" vote. I know Duvall to be one of the more conservative members of the council and this bill appeared to shrink government and save money. I wish he would have explained his opposition to the bill.  

I previously reported that the Council adjourned without consideration of the memorializing resolution opposing school vouchers and I said I unsure why. In fact, the resolution did pass, lumped with other bills in a "consent agenda." I missed noticing that when the consent consent agenda was passed.  The consent agenda is a a new procedure in which all resolutions that received unanimous approval in committee are lumped together and passed together by a single vote of the Council.  Any Councilmember however may pull a bill off the consent agenda and have it voted on individually. This seems like wise procedure and saves time on resolutions that are going to be approved unanimously. Thanks to Councilman Duane Dominy for providing this explanation.

Regarding the School Voucher resolution, Council Dominy explains, "We discussed it in the committee for some time and there were several concerns, but since the notice of recognition would only be sent to the body (Metropolitan Board of Education) that had already acted and held no binding effect on future actions I chose to not oppose it at this time."

I understand the logic of that. However, the resolution was an endorsement of the school board actions stating, "WHEREAS, it is fitting and proper that the Metropolitan Council show its support for the Board of Education’s decision to oppose school vouchers..." The school voucher bill will be considered by the State Legislature this year and the Metro Council should not be on record as supporting the MBOE's opposition to vouchers.  Had I been in the Council, I would have had to register my opposition to the resolution even if I was the lone voice doing so.

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update: Goodbye Barney Frank comic book

 

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update: What to Watch for in the Metro Council Tuesday Dec. 6th

Undoing Limo Price-fixing, Titans Stadium Funding, Privatizing the Tow-in Lot, and School Vouchers

by Rod Williams
update 12/4/2011


The Metro Council Agenda Analysis is now posted.

The Metro Council meeting agenda is now available. You can find the agenda at this link: Metro Council Agenda. The council meetings are more interesting if you have an agenda. However, I watch the council meetings so you don't have to so look for my highlights of the meeting, following the Council meeting. Below is what I see as issue worth watching. The council analysis is not yet posted so I will update this report as more information becomes available.

Resolutions RS2011-95 have to do with issuing bonds for the Titans stadium. There is some concern that the city is issuing 25 year bonds for improvements that will not last 25 years and that the bonds are for a longer period than the lease with the Titans. The bonds are funded by a ticket tax of $2.00. In the event the ticket tax revenues are insufficient to pay the debt service on these revenue bonds, Metro is pledging its non-tax revenues. These revenues include, but are not limited to, permit fees; franchise fees (cable, gas, and telephone); fines; court clerk fees; forfeitures and penalties; charges for services; and revenues from the sale of surplus property. (See the analysis for more.)

BILL NO. BL2011-4 on second reading sponsored by Councilman Stanley to require quarterly stormwater reports to be submitted to the Metropolitan Council. This may seem like a mundane issue but Stanley has argued that the getting of one big annual report does not give the council the ability to adequately monitor the program.  He makes a compelling argument. This bill needs to pass. Stormwater projects can be plums for favored councilmen and also the storm water fund is just too much money for bureaucrats to play with without effective council oversight.

ORDINANCE NO. BL2011-49 on second reading will repeals the $45 minimum fare fee for Limousine service and instead establishes that fares will be determined on a "time-usage basis,"  and that "livery services may also charge a flat rate for transportation between specific points." This seems like an undoing of the bill passed a couple years ago that essentially outlawed economy limo service and led to a law suit against the city. (See here and here.)  I was very disappointing that not a single councilman then in the council voted against the Limo price fixing bill at the time. This is a chance for members of the Council to redeem themselves. Watch this issue to see who is for and who is against price fixing. This issue is clear. If the Republican members and other "good" members of the council don't vote for this bill, I will be greatly disappointed.



BILL NO. BL2011-3. This bill on third reading sponsored by Councilman Tygard has been approved by Parks and Public Works Committees and has been amended. This bill would allow recreational athletic fields and associated structures to be constructed within the floodway. Last council session, Councilman Dominy argued in favor of the bill and Council member Evans argued against it. Evans argued that structures and fences associated with athletic fields could impede the flow of water.


Bill NO. BL2011-31 on third reading sponsored by Councilman Tygard amends an ordinance regarding the acceptance of food and beverages for Metropolitan Government employees, elected officials, and members of boards and commissions. The current law is so stringent that if a councilman attends a neighborhood meeting and partakes of coffee and cookies he could be in violation of the law. This bill restores some common sense and should pass with no problem.


BILL NO. BL2011-39 on third reading approves a contract for United Road Towing to administer the Metro Impound Lot. There was a lot of concern about this bill on the part of towing companies. One concern is that United Road Towing who would operate the tow-in lot also operates a towing company. City officials have explained that United Road Towing has a totally separate management structure for operating the tow-in lot and their towing service would not get any preferential treatment by the operators of the tow-in lot. This bill especially privatizes the tow-in lot and should save the city a lot of money. It deal is structured to benefit the city. United Road Towing operates tow-in lots in other cities and many cities are moving toward contracting for this service rather than operating the tow-in lot themselves. This is a good bill and needs to pass. (For more info see the analysis)


ORDINANCE NO. BL2011-40 (WESTERHOLM, TYGARD & MCGUIRE) This ordinance amends the Metro Code to increase the ticket tax on tickets sold for events at LP Field and to remove the maximum duration for the ticket tax. (To know more read the analysis. This is complicated.)

Memorializing RESOLUTION NO. RS2011-109 (Johnson, Matthews, Bedne) opposes vouchers for private private school tuition. If you believe in education reform and school choice this is a very bad bill and needs to be defeated. This is another issue to watch to see who the real conservatives are on the Council.


There is nothing on the agenda about the Predators arena contract. Why? The city is getting taken to the cleaners by the Predators. If the city does not act, the contract is automatically renewed. I expected a resolution regarding this issue. If someone can tell me why this was not worthy of a resolution asking the Mayor to renegotiate the Predators arena deal I would like to hear from you.


I believe it will be on the agenda in January.


Check back for more updates.

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The Congress almost handed President Obama Dictatorial Powers

Should the government have the right to detain an American citizen indefinitely without trial until Congress declares an end to the war on terror? If a citizen is arrested and found not guilty should the government still have the right to detain him indefinitely until Congress declares an end to hostilities? As I became aware of this pending legislation which would give the government the power to do just that, I was appalled. That is counter to all of our constitutional protections. This would have handed the President the power to become a dictator.

At one time, President Obama called the tea party "terrorist." Sure, that may have been nothing more than political rhetoric, but if this bill would have passed, the simple allegation of being a terrorist would have been enough to detain one indefinitely. Should this president or any president be given that kind of power?

We are not talking about foreigners captured on the battlefield, we are talking about American citizens. I do not think constitutional rights should be extended to foreign nationals, but American citizens only suspected of a crime?

This amendment which would have permitted the indefinite detention of Americans suspected of terrorism would have passed if not for the action of Sen. Rand Paul. Armed Services Committee Chairman Carl Levin (D-Mich,), with the agreement of Committee Vice Chairman John McCain (R-Ariz.)attempted to swiftly pass the amendment to the National Defense Authorization Act for Fiscal 2012, by unanimous consent. The amendment would have passed by voice vote, but was blocked by Sen. Rand Paul's objection. He then forced a roll call vote, in which the amendment was defeated, 41-59.

Our freedom are very fragile. We almost lost a very basic freedom.

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