This commentary originally ran in the Freestone County Times on April 10, 2014.

Recently, the City of Houston began considering whether to allow innovative new transportation services Lyft and Uber to operate in the city. These services, which allow ride-seekers to use a smartphone app to quickly summon a ride, are now attracting the attention of meddlesome local governments across the country. Consumers stand to lose a great deal through the regulation of these services.

It’s a familiar debate. Throughout the country, San Francisco-based Uber and Lyft have been exploding in popularity as consumers look for the least expensive and most convenient means of transport from Point A to Point B. Predictably, as with any new product or service that meets a need, governments are scrambling to figure out how to regulate and control them.

There is also a huge special interest group with an interest in enacting laws and regulations to keep the competition out: traditional taxi companies who for years have worked hand-in-hand with local regulators to build up barriers to entry for new firms in most major American cities.

Of course, businesses manipulating the levers of government to stifle entrepreneurship is nothing new, especially for the ride services industry. Take New York City, for example.

When an entrepreneur named Harry Nathaniel Allen formed The New York Taxicab Co. in 1907 with a fleet of imported French gasoline-powered taxicabs, there were no regulations on ride services in New York. He got the idea after being overcharged by a New York cab driver, and, having the freedom to do so, decided to build a better service. He painted his new vehicles yellow, to attract the greatest attention from potential customers, and charged by the mile instead of for the entire trip.

His business, and the industry he helped create, exploded.

Before long, there were thousands of taxicabs operating in New York, many of them belonging to tiny firms and owner-operators. Many of these were poor first-generation immigrants who didn’t have much, but had the ability to afford a cheap vehicle and start a small business ferrying riders around New York.

It wasn’t long before the Great Depression brought a decrease in taxi business in New York, and a drop in what fares cabs were able to charge consumers. Competition became cutthroat, and some larger companies started going out of business when they couldn’t compete. The industry began clamoring for protective regulation, and in 1937, New York City passed the Haas Act.

This established New York’s now-infamous medallion system for taxicab regulation, limiting the number of cabs to those in existence at the time. A medallion cost $10 in 1937.

Last week, the city auctioned taxi medallions for the first time since 2008. The winning bids were as high as $965,000, with a minimum bid of $650,000.

Now, immigrants who come to New York dreaming of starting a small business driving a taxi are largely out of luck, stifled by the government-imposed shortage of supply for licenses to drive cabs and the extreme cost of obtaining one even when do become available. The entrenched taxi interests like it this way. They want to keep people out, so the value of their medallions are propped up and competition is kept at bay.

Uber and Lyft are trying to change that with their new ridesharing service that connects people who need rides with drivers.

By giving riders the ability to choose a different service, they have increased their market share tremendously while also spreading like wildfire across the country. Their success is not buoyed by regulation or artificial shortages in licenses, but instead by actual consumer demand-the very same demand that is clearly evident in places like Houston, where the two companies recently announced entrance into the market.

For now, Uber and Lyft are operating in Houston for free, the only way they’re getting around the legal protectionism that licensed taxi operators enjoy. Houston, and other Texas cities, should open the floodgates of competition and allow consumers to have a choice in ride service, so that the best service can win-not by buddying up to government regulators, but by providing the best product.

Texas should be at the forefront of reviving the entrepreneurial spirit that once built the taxicab industry in this country, not the tail end of continuing to suffocate it.

Jess Fields is a Senior Analyst with the Center for Local Governance at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. He may be reached at[email protected].