Thevote was a long time coming and, really, the only path that the city couldhave taken.
Taxicab drivers hadsued the city and won when a Milwaukee County judge declared the restrictivecap and punitive secondary market unconstitutional.
In response, the citydecided not to eliminate the cap, but to allow 100 more permits to be releasedvia a lottery.
The overwhelmingresponse to the lottery—as well as the unregulated Uber and Lyft driversoperating under the radar—pushed the city to rethink its half-measures.
Despite heavylobbying by the taxicab industry, the council passed the new ordinance todaywith a unanimous vote. (I’ll assume Mayor Tom Barrett will sign it.)
And thus a new erabegins.
This has always beena fascinating story to cover. Not only does the taxicab industry touch so manyof our daily lives—or not, because taxi service in this city is so horrible—butbecause of the politics of the matter.
The most permitsunder the old system were held by Sanfelippo-owned businesses. The owner’sbrother, Joe, is a conservative legislator who advocates for free-marketpolicies.
Yet his own family’sbusinesses acted otherwise, trying to protect their cartel.
On the other sidewere the drivers represented by the Institutefor Justice, a libertarian law firm that’s trying to bust taxicab cartelsaround the country. The Institute called Milwaukee’s taxicab drivers “urbansharecroppers,” and they weren’t exaggerating. The cost of a permit under theold system ran as high as $150,000 and rarely came up for sale, shutting outthe majority of cab drivers from being able to work for themselves or formtheir own company.
And then there areUber and Lyft, two technology-based companies that have completely upended thetraditional taxicab industry. These companies, too, are libertarian in nature.It’s pretty safe to say that they fought the city’s attempt to regulate theirservices every step of the way.
I’m sure the oldtaxicab owners will file suit, since the permits they hold are now not worththe millions they once had. I don’t know if they have much of a case, since thecourt judgment declaring the old system to be unconstitutional seems to bepretty solid and today’s unanimous vote shows just where the city stands on theissue. But, of course, stay tuned for more details as they appear.
Here’s a statementfrom the Institute for Justice on today’s vote:
City ofMilwaukee Completely Repeals Taxi Cap
- Council’sunanimous vote implements 2013 court order that found cap unconstitutional
- IJ standsready to intervene if existing cab owners file suit to bring back theirmonopoly
MILWAUKEE—Last yearJudge Jane Carroll of the Milwaukee County Circuit Court declaredunconstitutional the city of Milwaukee’s law imposing a cap on the number oftaxicabs in the city. This morning the city finally complied with that orderwhen the Common Council voted unanimously to completely lift the capon how many taxicabs may operate in the city. In lifting its cap, Milwaukeebecomes one of the freest cities in the nation for drivers looking to enter thetaxicab market.
The new law requires taxis to complywith basic health and safety requirements such as inspections and minimuminsurance coverage. Long-time cab drivers like Ghaleb Ibrahim andJatinder Cheema have been waiting for this day for years. In 2011,Ibrahim and Cheema joined a coalition of other cab drivers and the Institutefor Justice, a public-interest law firm, in filing thelawsuit that resulted in today’s Common Council vote.
“This is the culmination of a longstruggle against an oppressive and unconstitutional system” said Institute forJustice Attorney Anthony Sanders. “It used to be that because of thegovernment-imposed cap, a Milwaukee taxicab cost more than a house. Taxientrepreneurs can now afford to keep their house and open a business, too.”
The law also offers a path forservices such as Uber and Lyft to be recognized and licensed, increasingtransportation options in Milwaukee.
The former cap, implemented by thecity in 1991, caused the price of a taxi permit to rise from $85 to over$150,000 on the secondary market. Under the law, the number of cab permits wasfixed at about 320. However, in response to the cabbies’ court victory, thecity voted last November to lift the cap on the number of cabs by 100. Then,this morning, the city moved to lift the cap altogether.
“The unconstitutional cap is nomore,” said Cheema. “Now, after driving in the city for more than a decade, Ifinally have the right to open my own cab company without having to buypermission from someone else.”
Despite today’s victory for aspiringcab operators, the struggle for taxi freedom in Milwaukee is not over. Theexisting taxi owners, who have enjoyed the protectionism offered by the city’scap for over 20 years, are not going away without a fight. They have vowed tosue to prevent the cap from being repealed. The Institute for Justice and itsclients stand ready to intervene in any lawsuit that seeks to prevent the cityfrom lifting the cap and to have the lawsuit dismissed.
The Institute for Justice has helpedopen taxi markets in Denver, Indianapolis, Cincinnati and Minneapolis, and formore than 20 years has been the nation’s leading legal advocate for the rightsof entrepreneurs.
For more information on the lawsuitto open Milwaukee’s taxi market, visit www.ij.org/milwaukee-taxis.
