March 7, 2013

Think twice about opening a moving company in Kentucky

By Think twice about opening a moving company in Kentucky

Bloomberg Businessweek‘s Patrick Clark has an excellent story about Kentucky’s anti-competitive licensing rules for moving companies. Here’s an excerpt:

In August, Marty Vaughn tried to open a College Hunks Moving franchise in Lexington, KY. She learned state law first required her to obtain something called a Certificate of Public Convenience and Necessity. To do that, Vaughn had to run a series of ads in local newspapers announcing her intention to go into business.

The month after Vaughn began running ads, seven Lexington moving companies filed a protest letter with the state, arguing that Vaughn should be denied a license. Their reasoning, according to the letter: “The authority sought by the applicant in this proceeding is directly competitive with that held by these protestants and will result in a diminution of protestant’s revenues.”

In plainer English, the existing moving companies didn’t want another competitor, and for the moment, that was enough to prevent Vaughn from opening shop. She hired a lawyer to try her case, but six months after her competitors filed their letter of protest, she says she still hasn’t had a hearing on the matter. That may not be surprising. According to the National Federation of Independent Business, it takes Kentucky moving companies a year to complete the licensing process under the best of circumstances, and only five new licenses have been granted since 2007.

“I’m holding out hope,” Vaughn says. “But I’m not very optimistic.”

If Vaughn is frustrated, she isn’t alone. The same month that Vaughn first applied for her moving license, a Kentucky company called Wildcat Moving sued (PDF) the state in federal court, arguing that the Certificate of Public Convenience and Necessity law violated the due process and equal protection clauses of the 14th Amendment.

Read the rest…

You can learn more about Wildcat Moving’s case here.

What to read next