Limo Limits

You might think that starting a limousine service would be a sure bet in Las Vegas, a city that boasts a 24-hour gambling strip, 120,000 hotel rooms, and millions of tourists a year.

But established interests and a pliant state legislature have stacked the deck against entrepreneurs looking to make money by driving people around town in style.

In 1997, Nevada toughened its limousine licensing law and created the Transportation Service Authority, which has the power to impound limos lacking a certificate of "public convenience and necessity."

The TSA regularly runs stings to ferret out gypsy operators. Penalties can include up to $10,000 in impound fees, $10,000 in civil fines, and $2,000 in criminal fines. The typical sting costs an unlicensed limo owner about $5,000, says Rich Lowre, president of the Independent Limousine Operators Association, a 45-member group that opposes the TSA.

Beyond fining clandestine limo services, the TSA has also made it tough for the outlaws to go straight. Getting a license isn't just a matter of purchasing insurance, hiring qualified drivers, and passing a safety inspection, as in neighboring California. Operators must also provide extensive financial information and prove to the TSA that they won't "adversely affect other carriers." And those "other carriers"–er, competitors–have a right under the law to challenge each applicant.

Hence, when John West applied for a certificate in 1997, Las Vegas' largest carriers, Bell Trans and Presidential Limousine, claimed West would "create detrimental competition" and "disrupt economical and efficient service to the traveling public." After a year of paperwork, the three TSA commissioners dismissed West's application nine days before he was scheduled to defend it in a public hearing. One commissioner felt West's application had become "too complicated."

As a result of such actions, West, Lowre, and another operator whose limo was impounded are suing the TSA in state court. Represented by the Washington, D.C.-based Institute for Justice, they are claiming that the regulations violate their constitutional right to earn an honest living. Says Lowre: "I've never been one to go out and fight. But this is an injustice I can't handle." The lawsuit is expected to go to trial by spring.