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The Politicization of San Diego's Pedicab Industry

As published in the San Diego Daily Transcript

by Vince Vasquez

Thursday, July 23, 2009

In the wake of a recent tragic pedicab accident, political forces in San Diego are now moving to clamp down on pedicab operators with new regulations that seemingly prioritize profits over public safety. Defending free-market principles at City Hall today can neutralize the troublesome rhetoric and desires emanating from the industry.

As the story unfolds from witness accounts, details of the holiday incident are now becoming clearer. On July 4th, Sharon Miller, a 60-year old visitor from Illinois, fell and died from a moving pedicab that was travelling along a pedestrian promenade prohibited to the spoked passenger vehicles. The pedicab operator, Sukru Safa Cinar, was arrested shortly afterward on suspicion of involuntary manslaughter, and has since been released pending the results of the police investigation. Cinar has yet to be charged with a crime, and a quick LexisNexis search suggests that such incidents are rare in San Diego – only one other pedicab-related accident was reported on in the last ten years – but that hasn’t stopped certain factions from distorting the truth.

In recent weeks, media pundits have (without facts) used inflammatory words to describe the state of San Diego’s pedicab industry, calling operators “out of control” and comparing rides to “bicycle roulette.” Equally unhelpful is the undercurrent issue of young foreign operators, which many veteran pedicab workers have grossly targeted as the source of the industry’s problems. Tempers flared at a recent public hearing where many operators spoke out vehemently against the “J-1s,” (derogatively referring to workers who purportedly arrive via J-1 visas), stating they are stealing local jobs, are overwhelmingly unskilled, dishonest, and don’t have knowledge of “the American way.” The fact that Cinar is a 23 year-old Turkish national with a temporary visa has been exploited to restrict foreign labor competition in a tumultuous economic period, which the City of San Diego regrettably appears to be a willing party to.

Declaring that the pedicab industry is “oversaturated,” the city’s deputy director of transportation has introduced regulatory changes that will dramatically change the nature of the business. In all, the city has floated more than 33 new laws for pedicab owners and operators to follow. A handful of these new rules, such as posting fare schedules and designating pedicab parking zones, are prudent and long overdue, but more worrisome are proposals that will reduce competition to the detriment of visitors, who have few viable transportation alternatives to personal automobiles in our busiest urban corridors.

Principally, the city seeks to reduce the estimated 430 current vehicle permits down to 250, using a complicated formula that will require existing pedicab companies to slash their workforce, and will leave few opportunities for future market entrants. In determining the permit cap size, city staff employed suspect methodology, including conducting an informal poll of pedicab company owners and analyzing the occupancy rates of hotels. This permit scheme would be used in tandem with a new zoning regime to restrict the right to operate in the most profitable, tourist-centric areas – downtown, Balboa Park, and the coastal communities, encouraging the creation of a lucrative monopoly that serves the interests of a few, to the detriment of many.

Pedicab caps (which are similar to taxi medallions) and excessive licensing requirements are classic forms of “rent-seeking behavior,” whereby interest groups use regulatory power to create barriers of entry to new market entrants, and in effect, create for themselves a guaranteed benefit – in this case, vehicle permits. Rent-seeking encourages political lobbying and even illegal efforts to increase the value of guaranteed benefits - consider that in 1970, all but one member of the San Diego City Council was indicted for conspiracy and bribery after colluding with the owner of the Yellow Cab Company to raise taxi fare rates by 22% in 1967. Institutionalizing new pedicab caps does nothing to ensure that dangerous pedicab drivers are off the streets, or that accidents won’t occur in the future, two core components of the public debate that are curiously missing.

To date, no one has publicly produced more than hearsay and anecdotal evidence to back up claims that local and state transportation and commerce laws are inadequate to ensure the basic safety of pedicab passengers. It’s important to note that existing municipal industry regulations, which were revised just three years ago, are more than twelve pages long, and include requirements for operators to wear a city-issued operating badge at all times, mandatory passenger seatbelts, and proof of $1 million liability insurance. Targeting immigrant labor and sensationalizing the issue for political gain seems nothing less than a diversion from the real issue: a lack of enforcement of existing industry rules.

With the San Diego Police Department experiencing its highest number of officer departures in its 120 year history, and tightening government fiscal constraints, our city leadership appears to be resorting to broad new restrictions on personal freedom to shore up its inability to serve the public good, just as it did with the alcohol beach ban last year. Rather than advance a pedicab permit cap, City Hall should employ 1.3 million consumer watchdogs to monitor industry violations, by placing current operating and vehicle permits in an online database, and allowing the public to register pedicab complaints online in a trackable format. Incentives for good behavior should also be created, such as recognizing model operators with new local industry awards, and an annual “Consumer Reports”-like ranking for pedicab businesses, two efforts which could be coordinated by city tourism boosters.

Government regulations that encourage cartel behavior and require businesses to slash jobs are wrong. Pedicabs are a dynamic component of our public life, create green jobs, and evoke the fun, youthful, leisurely spirit of our community. If laws are properly enforced, free enterprise competition will always weed out inferior service providers and keep prices affordable and fair for the public. This summer, City Hall should challenge the pedicab industry to reach higher service standards, rather than shrink it to a size it can control.