Chicago Aldermen Tell Startups to Go Away

As expected, Chicago alderman passed very stringent regulations and taxes on ride sharing and on AirBnb.  They will justify their decision citing fear, and the broken city budget.  As a Lyft driver told me last night, “They seem to be raising taxes and fees on everything but the budget never seems to balance.”  This was more telegraphed than Babe Ruth’s called shot.

Chicago alderman just made life more expensive for all Chicagoans.  The taxes will be passed along to consumers.  That person in that neighborhood that could never get cab service is going to find it’s harder to get service after the massive tax increase.  They will also have to pay more for the service.

Like property tax increases, everything a person does feels like a citizen is paying rent to the government.  Chicago is hopelessly broke.  The sooner they declare bankruptcy the better.

This action follows the cloud tax they passed last year.  Note, we already pay a .50 per ride tax if we use a credit card in a cab.

Another excuse the alderman used was to “level the playing field” between cabs and ride sharing companies.  The playing field was already level.  The ride sharing companies were out competing the cab companies.  They were taking them to school.  The cab companies couldn’t have seen the future and come up with their own mobile app?

No, they couldn’t because they were too busy trying to restrict supply and line their pockets.

Most of the time, competition is fair.  Government people will never learn.  The more they tax something, the more it will go into an underground economy.  Look at cigarettes.  Look at the drug trade.  Look at the liquor trade in the 1920’s.  There is all kinds of violence that happens when markets go underground.

Chicago is not alone.  New York’s general assembly passed an anti-Airbnb bill too.  In Austin, TX, they got rid of ride sharing.

Over the course of the last ten years, we have built momentum in Chicago with regard to startups.  Today we really have something cooking here.  If you have ever tried to recruit people to come to Chicago, you know it can be a tough nut to crack.  There are other startup communities out there.  While it’s not a fixed pie, density matters.  Chicago politicians just made it a little harder to recruit talent.

Tech people that come to the community to check it out use ride sharing.  They use Airbnb.  How it’s taxed and viewed by local politicians will help shape their impression of the city.  Are they tech forward?  Do they embrace innovation?

Clearly, the Chicago people do.  People were making great fill in income.  Some were making a living that they never would have been able to do in other jobs.  They were able to utilize their homes to pay the highest property tax rate in the country.  Clearly the Chicago politicians don’t embrace innovation.  It scares the hell out of them, and the people who whisper in their ear.   If Chicago politicians want to continue to be the city of “We don’t want nobody nobody sent”, keep passing high taxes and lots of regulation.

It would be nice if citizens could vote them out of office.  But, Chicago is incredibly gerrymandered to keep everything in place.

We have a Presidential election coming up.  Whenever people talk about a Presidential candidate and Supreme Court nominees, the inevitable point is abortion.  I suggest we change that point.  I want to know how a candidate feels about property rights.  I want to know how a candidate thinks about the difference between public and private, collective and private, for yourself or for the common good principles about property rights.

Without individual property rights, we can’t have a Republic.

I recently did a podcast with Dan Miklosz of The Founder’s Report.  You can listen to it here.  We talk about startups, the evolution of the Chicago startup community and some other things.

UPDATE

I want to be very clear that I was a piece of a team that changed the exchange.  Strat Planning was lead by James Oliff.  The initial movement was lead by people like Bill Sheperd, Joel Stender, Don Karel, and Aryeh Shender which I happily joined.  I don’t think that comes through in the podcast with the way Dan spoke about it.

 

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