Brew City Taxi Wars: The Fight for Transportation Freedom in Milwaukee

The Institute for Justice (IJ), the nation’s leading libertarian law firm, sealed its victory last week in a hard-fought case that will crack open Milwaukee’s cab industry. Twenty-two-years ago, Brew City capped the number of cabs permitted to pick up passengers off the street at 321, which works out to about one taxi for every 1850 residents. (Washington, Ghaleb Ibrahim, a Milwaukee cab driver who sued the city to lift its cap on taxi permits |||D.C., by comparison, has about one cab for every 80 residents.) These permits—which aren’t technically medallions but function the same way—sell for about $150,000 a piece. Taxi magnates Joe and Mike Sanfelippo own about half the total, which have a combined value of more than $20 million.

In its case, IJ represented three immigrant cab drivers suing for an opportunity to acquire their own cab permits on the grounds that the cap violuates the equal protection clause in the Wisconsin Constitution. Their win means the city will award 100 new permits to cabbies in a lottery next month.

Taxi cartels often thwart political reform efforts, but IJ's victory demonstrates yet again how the fight can be won in the courthouse. Over the years, IJ has scored wins to liberalize transportation poilcy in Denver, Las Vegas, and New York City. It’s currently fighting cases in Portland and Tampa.

But there’s an even more powerful tool for battling transportation cartels: technology. On Thursday, Uber, the high-tech car service that’s upending taxi markets in cities all over the world, opened for business in Milwaukee. If the company’s service proves as popular in Milwaukee as it has in other cities, an extra 100—or 100,000—cab permits won’t matter much.

I’m reminded of the horse-railway operators that bribed their way into obtaining exclusive operating franchises in nineteenth-century cities. How much are those franchises worth today?

Uber App |||Milwaukee’s cab wars are just getting started. There are rumblings that the city may sue Uber, and the Sanfelippo brothers are considering legal action. In a phone interview, Red Christensen, a vice president in the Sanfelippo brothers’ taxi company, told me that “there’s no need for additional taxicabs in this market,” and that Uber is operating "in violation of city law."

“As a company that operates in the public trust,” Christensen said, “our concern is for passengers getting into a car that doesn’t have proper insurance, such as what happened with a six-year-old child in San Francisco.” Christensen was referring to Sofia Liu, who was killed by an Uber driver on New Year’s Eve. Taxi cartels in cities all over the country are shamelessly using this tragedy in an effort to undermine Uber and protect their own interests. (I recently wrote about this issue in The Daily Beast.)

IJ’s Anthony Sanders, the lead attorney in the Milwaukee cab case, hasn’t done a formal analysis of the issue, but says he doesn't think Uber is violating any laws because the company is only working with drivers already licensed to operate a car service in the city. Since Uber drivers don’t pick up passengers that hail them on the street, they’re not required to have one of the city’s 321 cab permits.

In a statement, Uber said the service it's providing in Milwaukee "connects riders with commercially licensed and insured drivers."

Sanders says Uber’s entrance into the city “presents all kinds of opportunities for entrepreneurs including my clients, and it should be very welcome for everyone except the existing permit holders.”

Rob Montz recently covered D.C.'s Uber Wars for Reason TV:

Nick Gillespie and I covered a 2011 fight over a proposed medallion system in the district—a story that briefly landed me in jail.

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  • Nazdrakke||

    Their win means the city will award 100 new permits to cabbies in a lottery next month.

    Ah, we notice that you are starving and have decided to bestow a crust of bread to go with your bowl of gruel.

    I suppose it's progress though.

  • pan fried wylie||

    *Progress®

  • Notorious G.K.C.||

    So what happened to the charges against those journalists?

  • Notorious G.K.C.||

    A report a couple weeks later says "all charges against both Epstein and Tucker have been dropped and...they will not be prosecuted."

    http://homesdc.blogspot.com/20.....-taxi.html

    As Tulpa would have it, they were guilty and the prosecutors could totally have proved it, but they generously decided not to press charges, because their hearts are simply brimming over with compassion. They simply wanted to teach these guilty people a lesson.

    Just because you get all charges dropped doesn't mean you didn't do it!

  • Nazdrakke||

    And without even a beating first, what kindness!

  • Notorious G.K.C.||

    (I'm referring to the video at the bottom about DC)

  • RishJoMo||

    Those guys seem to know whats going on over there for sure.

    www.GoAnon.tk

  • The Late P Brooks||

    Twenty-two-years ago, Brew City capped the number of cabs permitted to pick up passengers off the street at 321, which works out to about one taxi for every 1850 residents.

    I certain this number was arrived at after careful scrutiny and rigorous scientific analysis on the part of Top Men.

  • robc||

    An argument can be made for licensing cab drivers.

    No legitimate argument can be made for capping the number. None.

  • AlmightyJB||

    Traffic congestion?

  • AlmightyJB||

    Although I suppose if the licenses were expensive enough that would help keep any oversupply to a minimum.

  • pan fried wylie||

    If that's legitimate, why don't we cap the number of drivers licenses too?

    Taxis are carrying people, who, in the absence of taxis are still going to need to go places, via car or bus etc. And although buses move more people per unit volume than a typical, non-clown-car, them stopping all the time has its own effect on traffic.

  • AlmightyJB||

    Yeah. I'm not saying it is legitimate just that it is an argument. If you opened it up completely you could drive a bunch of cars down to a certain high foot traffic area at rush hour jockeying to try and earn some beer money for that night. I don't know for sure that would be an issue only that it's possible if the cost to do so is minimal. I certainly think it should not be restricted unless there is a compelling reason. If that does turn out to cause serious problems then you can address it.

  • GILMORE||

    I just want to say.... Mr Sharif, I'm a huge fan of all your movies.

  • EDG reppin' LBC||

    I like his work from the 1980's best.

  • pan fried wylie||

    These permits—which aren’t technically medallions but function the same way

    A shitsandwich, by any other name, would smell as sweet.

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