Milwaukee, WI—The Milwaukee taxicab cartel is now punishing drivers who dared to stand up against the government-enforced monopoly. Today Yellow Cab Cooperative, a dispatch service, suspended from service at least 20 of the drivers who participated in a peaceful “freedom ride” earlier this week. The cab drivers, who would like to drive for themselves, are forced to rent their cabs from a select few the government now allows to own a cab in the city. The drivers message was clear: “Taxi Freedom: Let me own my own cab! More Taxi Choices.” Now, as a result of the cartel’s blackballing of drivers who dare to speak out for their own economic freedom, those who rely on the already-underserved taxi market in Milwaukee have even fewer transportation options on the street.
The freedom ride protest was organized by the Institute for Justice, a national public interest law firm that represents cab drivers in a lawsuit against the city of Milwaukee challenging the city’s cap on the number of taxicabs. There are only 321 cabs in Milwaukee and that number cannot go up. The owners of taxis, including those associated with Yellow Cab, benefit greatly from this government-enforced cartel. Now, Yellow Cab is using its power to silence drivers who want to be their own boss and punish them for speaking.
Harpreet Singh, a suburban taxicab owner and driver who participated in the protest and therefore is—due to owning his own cab—not affected by the suspensions, reported to the Institute for Justice that protest participants’ machines in their cabs suddenly went dark today and Yellow Cab ceased giving them new fares. A meeting between Yellow Cab and the owners of the cabs involved in the protest is reportedly planned for Monday, November 5, where they will discuss how to deal with the drivers who were expressing their view that the city’s current taxi law is unjust.
This assault on the cab drivers’ speech comes in the wake of a major lawsuit by the Institute for Justice: Should the city of Milwaukee be allowed to outlaw competition in the taxi market, causing permits to rise in price from $85 to a staggering $150,000?
In 1991, the city of Milwaukee prohibited any new entrepreneurs from entering the taxi market. The city council imposed a hard cap of 321 taxis for the entire city, and made it so that the only way to get a taxi permit was to purchase one from an existing permit holder. As a result, today the city has just one taxi for every 1,850 residents (compared to 1 in 90 for Washington, D.C., and 1 in 480 for Denver). Because of the government-imposed scarcity of taxi permits, the cost of those permits has risen in price from $85 to $150,000—more than the average cost of a house in Milwaukee.
“In the classic story of entrepreneurship, someone starts a taxi business in order to save up enough money to buy a house,” said IJ Staff Attorney Anthony Sanders, lead counsel in today’s lawsuit. “In Milwaukee, you need to save up enough money to buy a house just to start a taxi business.”
As explained in an Institute for Justice study, Unhappy Days for Milwaukee Entrepreneurs, the city’s taxi law does nothing but funnel money to a small group of entrenched businesses at the expense of entrepreneurs, who lose out on opportunities, and at the expense of consumers, who face poor service and long wait times.
“It isn’t the government’s role to play favorites, protecting a special few from competition,” said Sanders. “If the government tried to artificially limit any other industry, saying only 30 restaurants or three hardware stores could operate in town, everyone would agree it’s completely arbitrary and wrong.”
The Institute for Justice has helped open taxi markets in cities across the country, and for 20 years has been the nation’s leading legal advocate for the rights of entrepreneurs. For more on today’s lawsuit, visit www.ij.org/MKETaxis.