Regulations stifle Baltimore Opportunity: From street vending to operating taxicabs, regulations keep potential entrepreneurs with low income from getting started.


Baltimore is a city, to use a popular catch phrase of urban planners, "in transition." Many of Baltimore's once-mighty industries are gone. The city has struggled with unemployment and a declining population. Baltimore, during the 1980s and 1990s, however, witnessed somewhat of a renaissance, spurred primarily by the development of the Inner Harbor and the opening of Oriole Park at Camden Yards.

However, in the city's and the state's zeal to promote tourism, attract sports franchises and revitalize big business, Baltimore's proud history of local entrepreneurship and small enterprise has for the most part been overlooked. This has to change, for many entry-level opportunities - in such areas as vending, newsstand operation, taxi service and garbage collection - face oppressive government regulation or prohibition.

Street vending is probably the quintessential example of entry-level entrepreneurship. It does not require a formal education and it should not require large financial resources. Unlike numerous other cities, Baltimore does not place a cap on the number of vending permits it issues. But while vendors do not face a numerical limit, they nevertheless face heavy fees and numerous regulations imposed by the city and state. These fees and regulations can be prohibitive for a hard-working, but low-income vendor. Consider the fact that a pushcart vendor who sells food downtown must pay close to $1,000 for permits and setup fees above and beyond the cost of his or her wares.

The city also prohibits vendors from the most potentially lucrative market downtown - the Inner Harbor area. Since 1994, Baltimore also has banned vending in city-owned parks. To open up opportunities, the city and state must substantially reduce the fees charged for permits, streamline the regulatory process for obtaining permits, and open city-owned parks and the Inner Harbor to limited vending.

Baltimore's horse-drawn fruit-and-vegetable salesmen - the "a-rabbers" - also face an uncertain future. Due to city-imposed regulations and constant harassment and pressure from animal-rights activists, only about 40 a-rabbers engage in this venerable African-American entrepreneurial tradition. These industrious individuals (many of whom learned the trade from their fathers or grandfathers) represent a historical link to an era of more-sound communities and to a strong entrepreneurial ethic, especially in areas of the city plagued by drugs and urban decay. Unlike most historic preservation efforts, the a-rabbers do not rely on government subsidies or regulation to preserve their tradition. Rather, the a-rabbers ask only that the government limit its role to reasonable regulation of the horses and stables, and allow them to continue in their occupation.

Baltimore is rightly proud to be the home of one of America's most famous newspapermen, H.L. Mencken. The city's logo proudly proclaims Baltimore "The City That Reads." It is doubly ironic, then, that newsstands are prohibited within the city. Although people can buy newspapers from boxes (which are tightly regulated), newsstands are not allowed. This ban is irrational and raises serious First Amendment concerns through prohibiting a common means of access to information. It would be a fitting tribute to Mencken's legacy and an affirmation of the city logo for Baltimore to lift its prohibition on newsstands.

Taxi driving is another excellent, low-cost entrepreneurial opportunity. But in too many American cities, including Baltimore, would-be-entrepreneurs are prohibited from entering the market.

The state Public Service Commission regulates taxicabs in Baltimore and limits their number to 1,151 - a figure that has remained virtually unchanged for 20 years. In other words, no new taxi permits have been or will be issued by the commission. As a result, drivers must try to obtain one already issued. The going price: $12,000 to $20,000.

Although some cabbies can afford their own permits, most cannot and must therefore work for a company paying lease prices as high as $85 a day for the "privilege" of driving for someone else. The state's restrictive system of taxicab regulation has worsened working conditions for drivers - many work punishing 17-hour days just to make ends meet - and has produced poor results for consumers. Just try getting a cab in one of Baltimore's poorer neighborhoods.

The state should ease entry to the taxicab market by lifting its arbitrary and outdated cap, thereby providing entrepreneurial opportunities for drivers and better service to consumers.

Other entrepreneurial opportunities are crushed through Baltimore's monopoly on trash collection. The city's 508 employees do all of the trash pickup within city limits. The Baltimore County system is almost entirely privatized, with about 50 companies performing trash collection. Compared with the city's more than 500 employees, the county has only five.

Baltimore County's superior system provides entrepreneurial opportunities for dozens of companies and their employees while still serving the citizens. The city should reconsider its monopoly on trash collection and follow the county's lead by opening up its trash collection to private enterprise.

Too many entry-level opportunities in Baltimore - whether in vending, newsstand operation, taxicab driving or trash removal - have been shut down by a combination of state and local regulations.

Sports teams and tourism certainly bring jobs and dollars into the downtown area, but Baltimore's small shops and entry-level entrepreneurs also are a vital, year-round source of employment and opportunity for those struggling to gain a foothold on the economic ladder.

Removal of barriers and regulations would go a long way toward making Baltimore once again a center of commercial activity.

Baltimore must not lose sight of its industrious entrepreneurs struggling to survive in a changing city.

Scott G. Bullock is a staff attorney at the Washington-based Institute for Justice, a Libertarian organization. The article is drawn from a recently published report on barriers to entrepreneurship in Baltimore.

Pub Date: 12/15/96

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