DENVER–A price control measure has been introduced in the Colorado legislature aimed at third party delivery apps and so-called “captive” audience vendors, sparking significant opposition from a variety of business interests.
House Bill 26-1012 is part of a package of legislation majority Democrats have in mind to regulate consumer prices and limit what the bill sponsors claim is price gouging. “Consumer Protections to Promote Fair Market Pricing” is the only bill in the package introduced so far.
Under the legislation, third party delivery apps, such as Uber Eats or Door Dash, are required to list the in-store or in-restaurant pricing of the product when consumers buy through the app.
The bill also requires all vendors selling to a “captive consumer,” to adjust their pricing according to the average price of the product being sold in the surrounding county.
A “captive consumer” is defined as a consumer who is at a location in which the seller has no competitors in their service or products. This includes sporting or event stadiums, ski resorts, airports, hospitals, etc.
The price of a beer
For example, a 16oz. draft beer at Empower Field costs between $8 and $9 including tax. Briar Common Brewery, located about 0.5 miles from the Broncos stadium charges $6 for a draft beer. Under HB 1012, Empower Field would have to lower their beer prices to the average price found in the City and County of Denver.
The mandate affects more than just expensive stadium beer, as hospital patients are also considered “captive consumers.” The legislation prevents hospitals from charging patients more for items such over-the-counter pain killers, Band-Aids, or medical supplies one could get more cheaply from a local drug store.
While such price parity may sound well and good, economic experts say this is just more regulatory overreach, with no understanding of how markets actually work.
“It is not ‘corporate greed’ that produces higher prices at such events. Prices are signals that represent real market conditions of supply and demand. Higher rent, labor, and operational costs all increase prices without ‘gouging,’” said Nash Herman, fiscal policy analyst at Independence Institute,* a free market think tank in Denver.
Opponents claim overreach
The Colorado Chamber of Commerce and their Legal Reform Alliance are among those who have come out in opposition to the bill: “The Colorado Chamber opposes the bill due to feedback from our members that it’s overreaching, creating new operational and legal costs for businesses across multiple industries statewide with little benefit to consumers,” Meghan Dollar, senior vice president of governmental affairs and political operations for the Chamber, told Complete Colorado.
Other groups opposing the bill include the Colorado Hospital Association, Colorado Bankers Association, and the National Western Stock Show and Rodeo.
Herman says claiming the mandate as beneficial to a “captive” consumer is simply false labeling.
“To call people ‘captive’ at a sporting event or ski resort is frankly absurd. Coloradans have individual agency; we are not being forced to spend our money on anything other than taxes,” said Herman. “Coloradans deliberately choose to attend these events, where they can decide whether to spend money on snacks and merchandise or on nothing at all. If Coloradans deem the goods to be too expensive, then they will not patronize such companies.”
The bill has has been assigned to the House Judiciary Committee for its first hearing.
*Independence Institute is publisher of Complete Colorado.
