Free-market advocates like to say that excessive government regulations are harmful to small businesses. But although many don't realize it, consumers are usually the real victims.
Right now in Washington, D.C., for instance, a government agency, the D.C. Taxicab Commission, is actively and openly working to protect an established special interest at the expense of D.C. residents and visitors. It is doing this by preventing the car-for-hire service Uber from competing directly with taxis for customers.
Its reasoning? Allowing someone to offer a higher quality product at a lower or comparable price would be "unfair" to the cab companies who stand to lose some business.
It's hard to find a more blatant example of protectionist cronyism than a government entity telling several million people they should have to pay more for a lesser transportation alternative so that a small number of politically connected cab industry representatives can keep making money.
The Taxicab Commission is stifling innovation. If the agency has its way, getting around the city will become both more expensive and less convenient than it needs to be. Worse, if the ruling stands, it will send a two-word message to other prospective business startups: Don't bother.
This is bad for the entrepreneurs in question, but not nearly as bad as it is for the consumers who will never know how many creative solutions to everyday problems they're being forced to do without.