Sunday 12 December 2010

Five Star Regulation

This blog's hit count has been creeping up over the past couple of months. I have been informed by the Provincial Web Log Regulatory Agency that I have exceeded the number of hits that I am allowed, given current internet traffic demand conditions in Manitoba. Therefore, I am required to drive away readers by writing an excruciatingly boring post about something buried deep in the business section of the Winnipeg Free Press.

I chose City bus charter's plan to expand hits red light as my victim. On page B6
of the Saturday Free Press, we read about how our benevolent civil service is protecting us from competition and economic growth:
A little-known provincial regulator is putting the brakes on Winston Gordon's efforts to grow his bus charter business. Gordon's 10-year-old Winnipeg business, Five Star Bus Lines, operates five charter buses and has applied for seven more licences. ... "I know there is demand," Gordon said. "People are calling me all the time and they say they can't find any buses."
That's what he thinks. The provincial regulator knows better:
Iris Murrell, secretary of the Motor Transport Board, said the board has not issued any new licences or alterations of licences for at least a year. That's because it's the Motor Transport Board's understanding that, in fact, the marketplace has not grown and the larger industry dynamics probably back that up.
Despite the fact some may believe there is more business out there, the MTB's intelligence is to the contrary, she said.
No indication is given of who supplies their "intelligence", but we do get an indication of the level of their intelligence:
"We are here to maintain service to the general public," Murrell said. "If something is being proposed that will have a detrimental effect on that, it will not likely get a favourable consideration from the board. In the past year or so, a few existing carriers have applied to this board to add existing vehicles or expand their restricted boundaries and they have all been refused."
They are maintaining service to the public by preventing any improvement in service to the public. That sort of logic can only be fully understood by driving a railroad spike through your brain. It seems the mandate of this office is not to ensure that a minimum level of service is maintained, but to ensure that a maximum level is maintained by preventing any sort of investment that might possibly give consumers a higher quality product.

Government bureaucrats artificially capping supply not only results in poor service, but also in high prices. This is literally first year economics:
It's not just buses. The same can be said for the Taxicab Board, who's actions have not only resulted in poor service from a restricted supply of cabs supplied by an industry duopoly, but in a ridiculous market for licenses that can cost drivers upwards of $400,000 for something that ought to cost no more than a couple of hundred bucks in admin fees.

Allowing businesses to invest and expand and compete is what drives our economy. Governments should try to facilitate that, not prevent it. Many of these of regulatory boards in Manitoba far exceed their useful purpose, and should either be cut back, amalgamated, or eliminated entirely. The only reason for regulating an industry like bus charters or taxicabs is to ensure that minimum safety standards are met (though in the case of the Taxicab Board they can't even do that properly.) Somebody with some brains on Broadway should fire Murrell, gut the MTB and the Taxicab Board, and combine them into a single Transportation Safety Board with a limited and specific mandate that does not prevent entrepreneurs from investing in capital, hiring workers, and providing a better service to the public.

I told you it was a boring post. No pictures even. (Oh, I guess I do have a graph. I hope the PWLRA doesn't make me take it down!)


Gustav Nelson said...

"That sort of logic can only be fully understood by driving a railroad spike through your brain."


Keep up the good work, your blogs are great!

I would argue though, why do we even need a board of any kind, even for "basic" standards.

Brian said...

Crony capitalism at its finest.

the Stiff Rod said...

Nice try in terms of trying to bore me.....hahahahahah

cherenkov said...

Thanks Gustav

DG: I can see you have a high tolerance for boring material.. I will have to try harder. Next post: snow plow tires.

mungman said...

Good try trying to bore me on this, but I foiled you again! I had commented on this article on the freep website, so I found this to be a laugh a minute post! See I liked it so much I have to use exclamation points after every sentence!

cherenkov said...

thanks mungman!

spiritedmom said...

not me...i was totally bored! i didn't even finish it.

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