Like her attempts to shut down other small businesses in the past (like her “Lights Out at 11pm” proposal for bars or when she regulated the jet packs out of business), last Monday, Councilwoman Diane Dixon held a meeting at Marina Park to discuss the designs for a new government-run business that she envisions which will take taxpayer dollars and use them to fund rides on Balboa Peninsula. Sounds great, right? Except we already have a business that does that, and they are thriving without any need for the government to “help”.
All Peninsula locals know about the Downtowner– the golf cart with advertising that we see on the peninsula driving around all the time. The method of “hailing” them is simple: Download the app and signal them– pretty much like Uber. Within a few minutes, your ride will have arrived at your doorstep to take you to your destination.
The Downtowner business is owned by two entrepreneurs who are both also local residents of Newport Beach. Their revenue stream is based on the advertising on the side of the carts, allowing them to generously offer free rides in the local area (but tip your driver!)– anywhere on the peninsula.
However, Dixon has once again convinced Team Newport that government should be involved with business, and the city has decided to spend $224,430 of taxpayer money to create a brand-new crony business (a non-local, pre-existing business, selected by the council) to compete with the Downtowner– at taxpayer expense. However, as you all know, “free” isn’t “free” when it comes to government, and while the city has attempted to obfuscate the total amount of estimated rides from their official releases, with a little reverse engineering of the numbers thanks to Lido Isle resident Jon Pedersen, we can see that the total amount of annual estimated rides is about 10,103.
I know everyone just divided $224,430 by 10,103 — and yes, that means that the total subsidized cost-per-ride is a whopping $22 out of the taxpayer’s wallet. That’s $22 more for each ride than a free ride from the wedge to PCH by the Downtowner, which is actually $0 out of the taxpayers pocket.
It gets worse, though. As this giant bus which is being proposed will have regular routes, it will actually cause more congestion and only operate in the busiest months. Here’s why:
If a family from the IE comes down here with all their coolers and umbrellas and towels, they are going to try to park at the beach, first. If there are no parking spots, then they will drop off one parent and the kids and their gear and the other parent will go back up the peninsula, park at the bus stop, then take the bus back down to meet up with their family. To leave, they will need to do the inverse. This process has just turned two trips up and down the peninsula (there->back) into four trips (there->back->there->back).
Additionally, with scheduled stops, the system is operating even when there is no demand for it– again, contributing to traffic congestion. This contrasts with the Downtowner service which operates only on-demand, adding traffic only when there is someone who wants to go somewhere. They aren’t simply riding around aimlessly like Dixon’s bus idea is supposed to do.
So we learned that this bus actually provides no benefit that isn’t already provided by the free market, and that the subsidized rides will cost taxpayers about 3x more than an Uber would cost in the free market– and that’s the best-case scenario (most rides will cost 5x more). But we all know that no free market business charges per-rider, only this government sponsored “solution” would take that absurd approach. For example: An Uber for four people from Hoag parking lot to the Newport Pier is about $5, or about $1.25 per person. For the proposed shuttle, it would be four times the $22.21+ per-rider cost, totalling a whopping $88.86… each way– that’s more than 71 times more expensive for a family of four than the cost of the same ride using an Uber. Or, those same people could walk down the street and grab a Downtowner for quite literally $0.
However– perhaps most importantly of all– this is a proposal by the Newport Beach government to create a taxpayer funded business to compete inside of already-thriving economies.
Dixon, naturally, claimed that her competing bus idea wasn’t “competing”, but was instead a “complement to” existing services. Let me then take an unusual step of using this platform to speak directly to her:
Dear Diane Dixon: If there is more than a zero-percent chance that someone on that absurdly high-cost “free” bus would have ridden on the Downtowner or any other free market business, then it is not a “compliment”, it is “competition”. When you take business away from vendors, that is not “complimenting them”, that is “competing with them”.
If you think this is a bad idea for taxpayers, I urge you to send this article to your friends and to tell the council your thoughts, directly. Email them at email@example.com and let them know what you think about this proposal.