Tuesday, July 10, 2012

When did we get to the point that we reject the basic concept of entrepreneurship?

We've all - or at least most of us, depending on our age - have heard the phrase "invent a better mousetrap and the world will beat a path to your door."

It meant that if you came up with a better idea, people would pay for it. It also meant that if you were clever and creative, you could have better success.

This is the core basis of entrepreneurship - something that everyone says we need more of. You come up with a better idea or better way of doing something and you enter the market to see if others agree.

Maybe you find a more economical way to offer a service or process. Because of some innovation you've come up with, you can offer an item at less than what people are already paying.

Maybe your price is the same as what is already on the market, but you've got a better item or one that fits the needs of the consumer better, like in the mousetrap example. Certainly, there are plenty of mousetraps, but if yours does something the others can't, and people like the idea, they'll pay more.

Living by the water, we have mice. I willingly pay more for the traps that don't require me to come anywhere near touching the mouse when caught.

This is what forms the core of our nation and fuels the American Dream. Coming up with a better idea, marketing it and supporting ourselves and our families with the profits ... maybe growing into a large firm with a company and fortune to pass on to our descendants.

But what if government worked against you? What if the politicians tried to stop your innovation?

Yes, I'm referring to those same politicians who talk about entrepreneurship and tout that small businesses are the drivers of our economy, hiring more people than large corporations do.

What if they were doing everything they could to prevent you from offering a better product at a better price?

That's exactly what's happening in Washington, D.C., with Uber.

Uber is company that offers on-demand private transportation in various cities across the United States and Canada. You sign up, use your smart phone to request a ride, a car picks you up and takes you to your destination and they can bill your credit card on file. No more waiting for a cab. No more worry about having cash or credit cards to pay. No need to memorize bus schedules. And probably a cleaner, nicer looking ride. What's not to like?

Apparently, everything - if you're a taxi cab driver or company who now has competition.

So what do you do? You use the power of government to stifle your competition.

As Uber explains:

On Independence Day, Uber announced a roll out of a lower cost service that we call UberX. A less expensive Uber option on an all-hybrid fleet. We’re pretty excited about it and think it’s a great idea for cities across the country. What some of you probably noticed is that there was no roll out of this service in the District. That is because, only days earlier, the DC City Council informed us that they intended to pass an amendment to the taxi modernization bill that would make it illegal for Uber to lower its prices or to offer a low cost service in any form.

The Council’s intention is to prevent Uber from being a viable alternative to taxis by enacting a price floor to set Uber’s minimum fare at today’s rates and no less than 5 times a taxi’s minimum fare. Consequently they are handicapping a reliable, high quality transportation alternative so that Uber cannot offer a high quality service at the best possible price. It was hard for us to believe that an elected body would choose to keep prices of a transportation service artificially high – but the goal is essentially to protect a taxi industry that has significant experience in influencing local politicians. They want to make sure there is no viable alternative to a taxi in Washington DC, and so on Tuesday (tomorrow!), the DC City Council is going to formalize that principle into law.

This isn't just in DC - it's here in Ohio, as I detail at Ohio Watchdog: We're just a bunch of hapless rubes. Whether it's duct cleaning, roll-your-own cigarettes or food carts, government has become nothing more than a tool to be used against potential business competitors or to accomplish what your fail to achieve at the bargaining table (unions) or elsewhere (various non-profit groups who lobby for funding).

When did our government become a tool for stopping entrepreneurship? Why would any person who swore to uphold the Constitution of the United States think it acceptable to wield the regulatory power to protect an industry from competition. Why would any elected official agree to measures that actually hurt the very people they're supposed to serve? Why would any governmental body think it is okay to 'screw the public' by insisting that you pay higher prices - for anything?

These are rhetorical questions. I know the answers - I just have a hard time believing our nation has come to this point.

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