An Arkansas entrepreneur faced a brick wall of regulation when he wanted to open a new Taxi service in his town. The City informed him they would only issue him a license to start his venture on two conditions "He had to prove he would not take customers away from Little Rock’s only existing taxi company and prove that unmet demand made his competition “necessary.” Imagine that; the government wanted to make this man prove he wouldn't compete with existing businesses. Now if you're a protectionist you love this. If you support free market competition, you should find this repugnant. This almost Communist mindset that says only one business of this kind should exist.
The city used governments preferred tool to implement this policy licensing. In most cases, you cannot have a monopoly without government protection. Following the same logic practiced by Little Rock lawmakers you could make the case that they would only favor one grocery store, one parts store, etc, etc. In the words of Bernie Sanders who would want more than one deodorant? This is the same argument that was used to make Venezuela so great. They argue this benefits the worker, but it only benefits the connected elite at the expense of the individual. This strategy is what created the private transportation bubble in the first place. This policy helped propel market disruptions like Uber and Lyft to earth shattering effects it has had today. This disruption wouldn't have been so earth-shattering if not for the artificial barriers to entry.
Slides from the video:
Show Notes: http://ij.org/press-release/arkansas-entrepreneur-breaks-taxi-monopoly/