Friday Interview: Regulations That Threaten Economic Liberty | Eastern North Carolina Now

    Publisher's note: The author of this post is the CJ Staff, who is a contributor to the Carolina Journal, John Hood Publisher.

NCICL attorney details rules linked to taxicabs, home beauty salons

    RALEIGH     If you would like to start a small business in North Carolina, you might be unpleasantly surprised to learn that complying with state and local regulations can be incredibly costly and time-consuming. Tyler Younts, staff attorney with the N.C. Institute for Constitutional Law, is looking at regulations that he says run roughshod over economic liberty. Younts discussed the issue with Donna Martinez for Carolina Journal Radio. (Click here to find a station near you or to learn about the weekly CJ Radio podcast.)

    Martinez: Tyler, you, in looking at these regulations, are talking a lot about the concept of economic liberty. Tell us what that is and why the average North Carolinian should be concerned about that.

    Younts: Well, at the Institute for Constitutional Law, we believe that North Carolinians have a constitutional right to earn a living, to work, and to earn a living, and they have the right to keep the fruits of their labor. And so economic liberty is the concept that North Carolinians should be free to pursue, as the Declaration of Independence says, pursue happiness and, as an outgrowth of that, we include the right to work and keep their money, keep more of their paychecks.

    Martinez: I think we're all concerned about that. So you folks at the Institute for Constitutional Law have been looking at different types of regulations in North Carolina that somehow impede that ability to enjoy the fruits of one's labor. And interesting, Tyler, that one of the things you're looking at has to do with taxicab regulation. So let's say I decide I don't want to do Carolina Journal Radio anymore -- that's not going to happen! -- but let's say that I want to go out and become a cab driver. How easy or how tough is that to do in this state?

    Younts: You would find that it would be fairly difficult in many cities in North Carolina. In North Carolina, taxicabs are regulated at the local level. And, in many cases, they're actually regulated, oddly enough, by the police department. And there are a couple of different kinds of regulations that you would run into.

    One would be cab maximums. So, various cities have different numbers of cabs that they will allow to operate in their cities, so there might be a cap of 140 cabs in a city. If you were the 141st cab, you would not be allowed to open up your cab company. Another type of regulation would be a cab minimum. So in certain cities, there is a minimum number of cabs that you must own before you can open up a taxicab company. The number varies from city to city. It could be two. It could be five. It could be as many as seven.

    Martinez: I'm fascinated, Tyler, by the maximums and the minimums. So you're saying that if I decided that I wanted to convert my personal car to a taxicab, and it was safe, and I was able to get people to pay me to take them somewhere, I couldn't do it if I just had one car?

    Younts: Depending on the city that you want to operate in, that would be a problem. For instance, Mount Airy has a five-car minimum. High Point has a seven-car minimum. And, as I said, it varies from city to city, but that is a real impediment for people that are trying to enter this industry. And it really creates almost a cartel-type mentality, to where the established businesses can use the power of the state to keep competitors from entering the market. And that really has an impact, not only on these businesses, these entrepreneurs that want to start up their own company, but also on the consumers. And the consumers are not getting the benefit that they would under competition.

    Martinez: Tyler, why would a local government or a local official think that it's a good idea to try to put these limits on taxicabs?

    Younts: I think that some city leaders operate under the false premise that they can somehow determine how many cabs are needed in their town. And they believe, evidently, that there's a number that they can choose that works for their city, and that that's a better determination than what the free market would decide.

    Martinez: How could they possibly know that? I mean, just anecdotally, I could tell you that when my husband and I have been out and we've seen a play or maybe a baseball game, suddenly you've got 100 people lined up for a cab, and there's clearly not enough at that moment. So how could a city official even know that?

    Younts: They can't. And that's evidenced by the fact that in some cities -- it's been reported in Wilmington that there [have] been shortages, on weekend nights, of cabs. And I think there's even a waiting list for people that want to operate cabs there, and they've reached their maximum number of cabs that are allowed by law.

    Martinez: If I'm an entrepreneur, I'm hearing this interview and I'm thinking, "This sounds crazy to me. I just want to operate my car as a cab, make some extra money, support my family." What if I decided to just ignore all of these regulations? What would happen?

    Younts: You know, these are heavily regulated, and there's an extensive permit process in each city. And failure to comply with these regulations, I mean, it could result, depending on the city and the ordinances of the various cities, it could result in misdemeanor charges.

    Martinez: I could be up on criminal charges for this?

    Younts: It's possible.

    Martinez: Which tells me this is one of the reasons that you're looking into this, because this just sounds like overreach for government.

    Younts: Yes, absolutely. I would add that there are other kinds of silly regulations. I mean, there are price controls in this area. There are even silly things like requiring that cab drivers wear winter coats when it's cold. I mean, it is really that silly in some cases.

    Martinez: You're not joking, I take it.

    Younts: I am not joking about that. There are rules regulating the length of skirts of cab drivers. But, you know, one of the things that we would like to do is to try to use this issue to promote economic liberty. And so we are looking at these regulations. If anyone has any experiences trying to open up a cab company and they've run into these types of things, we would love to hear from them and to see if we could help.

    Martinez: Tyler, can they contact you at the North Carolina Institute for Constitutional Law? What's your website for them to do that?

    Younts: Yes, the website is www.ncicl.org.

    Martinez: Now, the taxicab situation is not the only issue you're looking into in terms of economic liberty. I understand that we've got some similar issues going on if someone wants to try to open up a home beauty salon. That also just boggles my mind. Tell us about that.

    Younts: Yes, well, there have been some recent changes in terms of how these home beauty salons are regulated. And there are a couple of regulations in particular that are troublesome. One is that there is a requirement of a separate entrance for a beauty salon that's in a house. So if you wanted to open up a beauty salon in your own home, you would have to put in a separate door for an entrance to your salon.

    Martinez: No.

    Younts: That's absolutely true. So now, older salons -- there is a grandfather clause for older salons -- but if you want to open up a new one, then you would have to have a separate entrance other than the entrance to your home. A second requirement would be a separate bathroom.

    Martinez: For what?

    Younts: Ostensibly it would be for your patrons to have access to a restroom. Now, as far as I know, most homes have a restroom, so, you know, it seems hard to understand why you would want to require a separate bathroom in addition to a separate entrance.