BLOOMINGTON, ILL – Julie Crowe’s dream of starting her own business was stifled when a group of potential competitors pressured City Hall not to give her a taxi license.
In this small central-Illinois college town, Crowe perceived there is a need for the services she could provide driving drunken college students from downtown bars to dormitories, fraternities and sororities.
She had been doing this as an employee for an existing shuttle bus service but wanted to start her own business.
“These girls come out of the bars inebriated in these skimpy little outfits and the last thing they want is to get in a van with some guy who they don’t know,” she said. “I want to make sure they get home safe and take them right to their doors.”
Last year, Bloomington rejected Crowe’s request to add a 15-seat van to the city’s mix of cabs and buses after competitors said the market was saturated. While Crowe’s situation may seem unique, it’s a common predicament faced by folks wanting to enter the heavily regulated taxicab industry.
“The regulations exist to protect people already in the industry—not consumers. The people who generally use taxis are out-of-towners who aren’t organized and don’t have much political clout in a given community where a service is offered, Walter Olson, a senior fellow at the Cato Institute, said. “The taxicab owners, on the other hand, are a concentrated industry in most communities with just a few owners who have political influence.”
The economic barriers to starting a taxi business vary depending on the city.
“In New York a taxi medallion costs hundreds of thousands of dollars. In a town like Bloomington, the upfront fee may be $20 but if you are looking at a hearing where your competitors are going to testify against you—you are going to feel you are going to have to hire an attorney—and suddenly the cost of entry becomes quite a bit higher,” Olson said.
Last year, Crowe didn’t hire a lawyer when her hearing was held. Her efforts to start her own business began unraveling then.
“I had a hearing before the city manager and all of my potential competitors showed up to testify against me or wrote letters against my application,” Crowe said.
Crowe’s application was denied on the grounds that her business was “not in the public interest.”
A later appeal to the full Bloomington City Council was also rejected on the grounds that the community didn’t need another shuttle service.
But not all of those using the shuttles see it that way.
“These buses provide a valuable service because the alternative is some college students will drive drunk,” said ISU student Michael Kasper, a business administration major. “And there aren’t enough buses out there. I’ve left bars at closing time and there wasn’t a bus available to take me home. Then you end up calling friends and try to find someone who is sober and willing to get out of bed at 2 a.m. to give you a ride. That’s not easy”
With students like Kasper expressing a desire for more buses, Crowe is perplexed by her denial.