These regulations add tens of thousands of dollars to the normal start-up costs of new companies. First, Lisa needs a license to operate the cab. Or, more accurately, she needs licenses for her budding enterprise. In other words, before she can begin her company, local government officials need to approve and register her business. This, of course, presumes that Lisa is allowed to establish her company.
Many cities simply prohibit new cab companies from starting up.
Some, such as Columbus, Ohio, and New York City, have moratoria on issuing new taxicab licenses. Even when there is no moratorium on new cabs, cities commonly require proof that the taxi company is needed. Some cities require public hearings every time someone wants to start a new company or add a car to the fleet. But the process makes it almost impossible for new companies to begin legally. This requirement is particularly onerous for small companies.