Portland Fines Businesses for Offering Low Prices During Recession

By Duane Lester - April 26, 2012
AllAmericanBlogger

It’s rough out there. You know this. When you can catch a deal on something you will use, you take advantage of it.

Unless you live in Portland and want to get a discount on a Towncar. Then, it’s time for government action:

The Portland city council two years ago put in place regulations that force limousine and sedan services to charge a $50 minimum for rides to and from the airport, and at least 35 percent more than taxis for trips to any other destination. And these transportation companies cannot pick up customers until at least an hour after the customer calls for a ride.

And it gets worse. Daily deal companies such as Groupon and LivingSocial partner with local businesses looking for new customers and offer limited-time specials that allow people to buy goods and services at a discounted price.

But when two companies offered their chauffeur services at a cut-rate through Groupon in separate months last year, Portland responded each time by assessing fines on every Groupon sold: a total of $635,500 for Towncar.com and $259,500 for Fiesta Limousine. The firms refunded their would-be customers rather than risk going bankrupt.

Really try to wrap your head around that. The city is actually fining companies for offering a service at a low price. In this economy!

The logic, if you want to call it that, is to protect the taxi cab business, because if Fiesta Limousine were allowed to decide to charge a low price for a ride to the airport, who would want to take a cab?

This is how the leftists in Portland are justifying this:

These sorts of regulations are usually passed in the name of consumer protection, even though they often result in consumers paying more for car rides. However, Frank Dufray, administrator for Portland’s Private-for-Hire Transportation Program, which regulates both taxi and livery services, said the laws aren’t intended to help consumers or the city, but to protect market share for the taxi industry.

“The main thing is that you don’t want the Town cars to take all of the best fares, which are to the airport, and not leave any for the taxi industry,” he said. “That’s why there’s a minimum fare and a one-hour wait requirement.”

Aw, that’s nice. Let’s break this down so we can really appreciate the awesomeness of this.

Rather than allow you Portlanders to decide what service is best for you, these folks have decided that it’s better to use force to coerce private businesses to charge higher prices than they want to for their services, so that other private businesses who provide a similar service can compete in the “market.”

They would rather the business owner go out of business or go to jail rather than compete in the free market, all while charging you more than you’d otherwise have to pay.

How is that legal? That’s what the Institute for Justice wants to know too:

Can the government bar entrepreneurs from offering competitive prices, online discounts and prompt service merely to protect politically powerful insiders from competition?
That is the question the Institute for Justice (IJ) and its clients seek to answer though a federal lawsuit they have filed challenging Portland, Oregon’s anticompetitive limousine and sedan regulation.

…

Portland cannot constitutionally seek to protect taxicab businesses from competition at everyone else’s expense. On April 26, 2012, IJ teamed up with Towncar.com and Fiesta Limousine and filed a federal lawsuit in the U.S. District Court for the District of Oregon to vindicate the right of Portland’s limo and sedan operators to earn an honest living free from excessive government regulation.

Nice!

Here’s to the good guys and liberty winning the day…someday.