Taxis

Who's Trying to Destroy Ride-Sharing Services This Week?

Chicago and Georgia taxi drivers try to shut down the competition

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Mustaches, not medallions
Credit: Raido Kaldma / Foter / CC BY

Apparently not regulating ride-sharing services like Uber and Lyft as harshly as Chicago does taxi services is a violation of the rights of tax drivers. That "interesting" argument, pretending the expensive regulatory protection schemes of taxi services is something being forced on them and not something the industry itself wants to limit competition, is the basis of a lawsuit filed in Chicago to try to fight ride-sharing companies.

The lawsuit though, is actually quite blunt about protecting the taxi industry's assets, not reducing oppressive regulation. Via Bloomberg:

Chicago-area taxi operators claim in a lawsuit that the city is violating their rights by allowing the unregulated ride-share services run by Uber Technologies Inc. and Lyft Inc. to operate on its streets.

The failure to apply taxi and limousine rules to the two San Francisco-based companies threatens to devalue the more-than 6,800 operating permits issued by the city, which have a total market value of $2.38 billion, according to a complaint filed today by the cabbies and their trade association in federal court in Chicago.

That puts the value of each operating permit at $350,000. Furthermore, Bloomberg notes, "Not enforcing the taxi rules against the companies violates federal constitutional guarantees of equal protection under the law and breaches the taxi operators' contracts with the city, according to the complaint. It also enables unregulated drivers to discriminate against the elderly or poor who may not be able to use a smartphone to summon one of their cars." Hey, those elderly and poor folks might be able to afford a smartphone if they didn't have to pay so much for taxi services, thanks to the city-taxi permit racket.

A spokesman for the city of Chicago's law department said the lawsuit has no merit, while Uber shot back, "After years of neglecting Chicago drivers and passengers alike, the taxi industry has resorted to name-calling and frivolous lawsuits." Unfortunately, Uber's also working with Mayor Rahm Emanuel to create a new regulatory system, so we'll just see if just end up with a second form of protectionist rules to ultimately make it harder for newcomers to compete with Uber and Lyft.

Meanwhile, a group of lawmakers in Georgia have introduced a bill to increase regulations on taxi services in order to control the services. Peach Pundit analyzed the legislation:

The bill, filed yesterday, would add a host of statutes related to "transportation referral service provider[s]" (ie. Uber, Lyft). It would allow the Department of Public Safety to license individual drivers, charging them up to $100 annually, and adds a number of other compliance regulations, including a requirement that they obtain "either a certificate of public necessity and convenience or medallion."

"Certificates of public necessity" make up the system by which existing businesses and service providers are given veto authority by the government to prevent competition. The Pacific Legal Foundation just recently won a lawsuit to block this system from being used to prevent the creation of new moving companies in Kentucky.