In the case of many local governments (like SF's) I think it has less to do with cultural engineering, and more with protecting a clique of well-connected businessmen. Same reason Louisiana monks can't sell caskets without a casket-making license...

This kind of corruption gets lost in the political shuffle. Both sides of the argument want so desperately to over-simplify the issue into regulation is good/bad as a boolean decision rather than attack specific classes of regulation at their core. It's a lot harder to uncover the corruption behind bad regulation than to vilify regulation at large, which is why I suppose those who have much to gain from the argument choose to simplify it.

Hey! Everybody benefits from simplified regulation. Of course those arguing For it benefit.

And 'benefit' here means entering into fair competition with existing establishments, so it isn't really a benefit. Those establishments with 'protected status' also only 'lose' by having to be competitive too. That's not right or wrong - that's supposed to be the normal free-market ecosystem.

Reducing regulation and returning to a fair ecosystem for small businesses is all that is really being proposed. There will be winners and losers. But the consumer will normally win, and there are a lot more of us.