Recently, an Uber driver was pulled over in Dewey Beach DE (near where I live) and fined over $500. The reason? Not having a town license for doing business.
Reportedly, Uber has an agreement with the state of Delaware. It’s called a memorandum of “understanding,” which basically means a payoff to the government, permitting Uber to do business in the state. Dewey Beach DE — a tiny, thinly populated seaside village mobbed with people during the summer season — evidently wants its piece of the profit Uber has created. [Source: Dan Gaffney Show on Delmarva Broadcasting, 105.9 FM, Lewes DE 8/11/15]
It’s not just this particular town, and it’s not just the state of Delaware. It’s all 50 states, it’s the federal government, and — in fact — it’s the nature of government, at least government as we know it. Governments shake down businesses for their own ends. Some businesses use government (including licensing laws) to throttle or prevent competition.
No small town (or giant nation-state) should be shaking down anyone. It’s up to the people and property owners in the town to decide how to fund their town’s services, which in a society of limited government would be very few and far between (basically police and courts).
It’s deeper than that, however. What actually is a “business license” anyway? A business license is permission to do business — in short, permission to exist. Nothing in nature, rights or morality justifies such a concept.
It’s proper to talk about licenses, including associated fees, when one enters a voluntary contract. For example, when you buy a house in a neighborhood, you willingly agree to the terms and fees of the neighborhood association (if there is one). When you join a health club, you agree to their fees and terms. Those responsibilities accompany ownership of the property or services you purchased — on terms to which you freely agreed.
But a business license is not permission to do business on someone’s property. The premise of a business license is that all property is publicly and collectively owned. You’re “intruding” on public property merely by existing, according to the idea underlying a business license.
Business licenses enable governments to hold a claim on everything that goes on in a particular geographic area. It’s their way of saying, “Whatever profit you make — we own part of that, too.”
Cab drivers and others who compete with Uber will complain that they get saddled with licenses, fees, and all kinds of requirements to ask permission to do business. Their complaints are valid. But the answer is not to saddle new companies like Uber with the same restrictions. The restrictions should be lifted off the cab companies. If it’s a “level playing field” you seek, then level it off by reducing or (best case) eliminating the regulatory and tax burden placed on businesses in the first place.
On the Dan Gaffney Show discussing this issue in Delaware, one caller suggested simply raising the state business license fee and eliminating the town license fees. That way, the caller reasoned, “there will be more than enough money to take care of the services required.” This is highly naive. It presupposes that governments really seek to limit their expenditures and activities. Actually, governments are more like gambling-addicted or drug-addicted relatives. The more money you throw at them, the quicker they blow it — and the more money they demand, feeling even more entitled than before. We have particularly seen this at the national level, but it’s arguably everywhere.
There is no way to curb or control the cost of government other than challenging the government’s claim that you have no right to exist without it. The issue here is not only the individual rights of the people who own and operate Uber, private cabs or any other private enterprise or service. It’s also the individual rights of the consumers.
When government hurts businesses, businesses hurt the customers they serve.
One of two things will happen in Dewey Beach. One, Uber will stop servicing this town. Or two, Uber will still come to Dewey Beach, but prices will go up, because fines and licensing fees are passed on to customers.
Costs imposed by governments are always passed on to the consumers. This is not due to the greed of the business owners; this is due to the unquenchable greed of power-hungry governments.
Dewey Beach happens to be a big drinking town, at least in the peak of summer. Cabs are in short supply, and some people are willing to take Uber from as far away as Washington DC, Baltimore or Philadelphia (3 hours away) in order to enjoy the convenience and safety of letting a professional handle the driving. This is good for safety, and good for the local establishments in the town. Advocates of expansive and expensive government (national or local level) claim to care about these things; but it’s power and/or money that they’re really after, not these things.
Private enterprises like Uber are providing badly needed services to people both able and willing to pay. Government impairs, harms and ultimately destroys everything it touches. While we need a limited government to uphold contracts, protect private property and keep thieves and violent people off the streets, we do not need the kind of government who feels compelled to pull over a privately hired cab service and fining it $500 for merely existing and driving through town.
It all happens because of the toxic, false and inherently unjust idea that people need permission to trade or associate with other people as they see fit. Permission? Says who? By what right, and for what purpose? Until or unless most of us start to challenge this basic premise, governments (large and small) will continue to get away with throttling and harming both business owners and their customers.
The business of America is supposed to be doing business. The best within all of us makes that entrepreneurial, creative and productive spirit possible. We’re all consumers, and depend on business for that reason. The question isn’t why petty tyrants at the local or national level will not let us function. The question is why we keep permitting them (if not encouraging them) to throttle us in this way.
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