While everyone was preoccupied with the impending elections, and particularly the presidential race, a federal appeals court quietly issued a pair of rulings upholding deregulation in the taxi and ride-hailing market. ADVERTISING While everyone was preoccupied with the impending elections,
While everyone was preoccupied with the impending elections, and particularly the presidential race, a federal appeals court quietly issued a pair of rulings upholding deregulation in the taxi and ride-hailing market.
The 7th U.S. Circuit Court of Appeals issued two separate rulings last month affirming decisions that reforms opening up taxi markets to greater competition in Chicago and Milwaukee did not violate the rights of entrenched taxi interests. The Chicago case concerned the city’s decision to allow ride-hailing services such as Uber and Lyft to operate. In the Milwaukee case, the largest taxicab operator in the city sued after the city removed the cap on taxi medallions, which significantly reduced the artificially inflated resale value of the medallions.
Judge Richard Posner did not mince words in the court’s Milwaukee decision: “The plaintiffs’ contention that the increased number of permits has taken property away from the plaintiffs without compensation, in violation of the constitutional protection of property, borders on the absurd. Property can take a variety of forms, some of them intangible, such as patents. But a taxi permit confers only a right to operate a taxicab (a right which, in Milwaukee, may be sold). It does not create a right to be an oligopolist, and thus confers no right to exclude others from operating taxis.”
The decisions were hailed by the Institute for Justice, a libertarian public-interest law firm that represented drivers and entrepreneurs in both cases, and which also has won legal victories against taxi regulations in Denver, Minneapolis and Bowling Green, Ohio.
“These cases clear the way for transportation freedom across the country,” the institute’s Senior Attorney Anthony Sanders said in a statement. “For too long, cities across the country have embraced an outdated mode of transportation regulation that says competition is to be feared and that freedom for taxi drivers or other transportation entrepreneurs is unthinkable. Today’s rulings confirm that there is absolutely no legal barrier to other cities’ joining the rising wave of cities embracing transportation freedom.”
Ride-hailing services have sparked a flurry of regulatory activity, both for better and for worse. Initially, governments rushed to impose regulations on the renegade disrupters, particularly in large cities with powerful traditional taxi interests. But, as consumers have increasingly rendered their verdict in favor of ride-hailers, and the inevitability of the success of the new business model has set in, there has been a backlash wave of deregulation — for both ride-hailing companies and taxis.
San Diego followed Milwaukee’s lead, lifting its cap on taxi permits two years ago, and cities across the nation — from Portland, Ore., to Salt Lake City to Dallas and Fort Worth, Texas, to Sarasota, Fla. — have deregulated in recent years.
This is a great victory for entrepreneurs looking to make a living and consumers, who benefit from the increased competition in the form of lower prices and better service. Now, if only occupational licensing laws and other regulatory and protectionist barriers could be brought down in equal measure and fervor in other industries.
— The Orange County Register
