Editorial: City should let market decide on ‘necessity’ of new businesses

For the second time in less than three years, Hollister council members haggled over an application for a new taxicab carrier in the city. Once again, it underscored the absurd notion that elected officials are deciding on the “necessity” of a new business. It also underscored that the city should amend its code and remove the demand provision when weighing any future taxi applicants.

Council members in a 4-1 vote approved LTD Taxi’s permit application to operate in Hollister. The business joins Hollister Taxi and Yellow Cab – which gained approval in 2009 by a 3-2 council vote – as three legally operating cab carriers in the city.

Although it certainly makes sense for a city and its police department to conduct research on taxi applicants when it comes to public safety, and ensuring operators and their drivers offer a safe means of quasi-public transportation, there is absolutely no reason in a capitalistic culture for government officials to even sniff the idea they have authority over consumer demand and deciding the number of businesses allowed to compete against one another.

If a new auto shop opened, would council members compile a list of other similar businesses and make judgments as to whether we need another one competing with the existing mechanics? Would they make decisions on demand for new restaurants, salons or clothing stores? Of course not, so why does the city code call for the consideration with taxicabs?

In the 4-1 decision to approve LTD Taxi’s permit, Councilwoman Pauline Valdivia was the lone dissenting vote. Although she attributed her decision to claims from Hollister Taxi that LTD continued operating as a cab business while awaiting permit approval, Valdivia acknowledged doubts in an interview that a third cab business is necessary. In the 2009 decision on Yellow Cab, in fact, she openly talked about necessity and that a second carrier would only harm Hollister Taxi’s business.

Valdivia at times clearly does not understand her role as an elected representative, while several council members have openly criticized their own given authority to weigh necessity with new taxi operators.

So why even have the interpretation on the books? City laws should not allow officials authority to play puppet masters with commerce, and council members must remove the provision from the code.

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