Let the Transportation Entrepreneurs Roll

The transportation industry has seen a staggering amount of change in recent years, thanks to hard-working and thoughtful entrepreneurs. But regulators and cartels are pumping the brakes. Whether it’s banning tech-savvy ridesharing firms like Uber, Lyft and Sidecar, meddling with fares, or artificially constricting the supply of taxi permits so that independent drivers can’t possibly afford to break into the market, special interests and their friends in City Hall are working hard to shut out competition.

As recently as 2013, government permission to own a cab cost as much as $100,000 in Jersey City, $360,000 in Chicago, and $1.3 million in the Big Apple. Most of these costs are shouldered by drivers on the lower rungs of the economic ladder whose only chance to succeed is by passing the costs on to consumers like you. Thankfully, the surge of ridesharing apps has already dealt some serious damage to the taxi cartels; medallion prices are now as low as $670,000 in New York City and $270,000 in Chicago. Values are expected to continue to decline.

But taxi caps are still damaging, and they aren’t the only governmental barriers in the business. In Tampa, limo and sedan drivers have been forced to charge consumers $50 a ride, no matter how short the ride—even if drivers want to charge less. In Portland, these same services face a law that says they must charge 35 percent more than taxicabs for any trip and wait an hour before picking up their customers, in addition to a $50 minimum charge requirement. Up until last year in Nashville, limo and sedan drivers were forced to charge a minimum fare of $45.

These ballooning costs are the result of laws that are, at best, vestiges of a bygone era and, at worst, schemes to protect the profits of industry insiders while pretending to protect customers.

The Institute for Justice’s Transportation Initiative was created to help transportation providers and their customers enjoy the promises of economic liberty. If you are facing burdensome transportation regulations in your city, email us at activism@ij.org for help.

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