Tampa Minimum Fares - Backgrounder

Litigation Backgrounder

Hillsborough County Transportation Commission vs. Consumers, a Driver and a Small Business:

Government Commission Forces Consumers to Pay More; Prevents Competition and Job Creation

 

The Issue in a Nutshell

 

The government shouldn’t make it a crime for businesses to give customers a good deal merely to protect politically powerful insiders from competition. Yet that is exactly what the Hillsborough County Public Transportation Commission is doing by forcing limo and sedan drivers to charge consumers $50 a ride, no matter how short the ride, even if drivers want to charge less.

A coalition including a driver, his small limousine business and customers in Hillsborough County, however, has finally had enough and has filed suit in Circuit Court arguing that the commission’s mandatory minimum fare violates the Florida Constitution’s protections for entrepreneurs and consumers alike. To watch a brief video on the case, visit: www.IJ.org/TampaFaresVid.

The commission’s job is to protect the public, not to protect taxicab and other limousine companies from competition. Instead, it is forcing customers to overpay for limousine services and impeding job creation by preventing small-business owners from expanding their businesses by offering better deals to potential customers.

Not only has the PTC directly harmed the people of Hillsborough County, but it has violated multiple sections of the Florida Constitution. That is why a coalition including Tampa consumers, a limousine driver and his small limousine business has joined forces with the Institute for Justice to vindicate the right of entrepreneurs to offer customers a better deal.

 

Introduction

As a major tourist destination, Tampa claims to offer a “unique and exciting experience for everyone.”1 Unfortunately, these unique and exciting experiences include paying unusually high costs for transportation. One major reason Tampa limousines and sedans charge so much more than their neighbors is they have no choice. A “minimum fare rule” created by the Hillsborough County Public Transportation Commission (PTC) makes it illegal for drivers to offer lower prices.

The PTC’s minimum fare requirement has increased over the years, but its current version can be found in Rule 1-20.001(4)(a) of the Rules of the Hillsborough County Public Transportation Commission2. The rule states that limousine drivers must charge a minimum of $50 per hour and that no customer can be charged for less than one hour. In other words, every ride in a limo must cost $50 or more, no matter how short the ride may be. Although drivers are allowed to charge more than the minimum, charging less than the minimum can lead to fines and even the destruction of the driver’s business.

The PTC was created by the Florida Legislature, not by Hillsborough County. In 2001, the Florida Legislature gave the PTC the power to set limousine prices throughout the county.3 Not surprisingly, the PTC has abused this power to set minimum fares at the request of “the industry.” Unfortunately for the people of Hillsborough County, the PTC appears to think that “the industry” simply means large taxi and limousine companies.4

Ironically, the PTC was created to “protect the traveling public.”5 Instead it harms consumers by forcing them to pay fares that are well above what many drivers would otherwise charge. These drivers want to offer better deals to their customers, but the PTC will not allow them to do so.

Now, a coalition of customers, a driver and a small limousine business is fighting back. Represented by the Institute for Justice, a national public interest law firm that fights for economic liberty, the coalition is suing the PTC in Florida circuit court to put a stop to the PTC’s minimum fare rule.

The Florida Constitution protects every Floridian’s right to economic liberty—the right to practice one’s chosen occupation free from unreasonable government restriction. The Florida Supreme Court has stated that this includes the right of consumers to “freely bargain” for services.6 This means that the PTC is not only harming customers, entrepreneurs and tourists, but the PTC is also violating the Florida Constitution.


The Plaintiffs

On August 28, 2013, Thomas Halsnik, Black Pearl Limousines, Kenrick Gleckler and Daniel Faubion joined with the Institute for Justice and filed a lawsuit in the Florida Circuit Court for Hillsborough County.  For the entrepreneurs—driver Thomas Halsnik and his company Black Pearl Limousines—this lawsuit seeks to vindicate their right to economic liberty.  For the customers—Kenrick Gleckler and Daniel Faubion—this lawsuit seeks to vindicate their right to freely bargain for services.


The Defendants

The defendants in this case are the Hillsborough County Public Transportation Commission and its chairman, Victor Crist, in his official capacity.  The PTC is responsible for enacting and enforcing the minimum limousine fare rule.  The PTC is an “independent special district” created by the Florida Legislature to supposedly protect the transportation customers of Hillsborough County.7

 

Legal Claims: The Right to Earn an Honest Living and the Right to Freely Bargain for Yourself

The PTC has violated two different sections of the Florida Constitution. These are the Due Process Clause found in Article I, Section 9 of the Florida Constitution and the Equal Protection Clause found in Article I, Section 2 of the Florida Constitution.

Fist, the manner in which the PTC has caused financial harm to the limo driver, small business and customers has violated the due process rights of each plaintiff, including the right of drivers and small business owners to earn an honest living and the right of customers to bargain for lower prices. In order for such harm to be constitutionally permissible, it would need to be reasonably related to a legitimate government purpose. Pure protectionism, however, is not a legitimate government purpose, and the minimum fare rule is not reasonable. Numerous other cities around the country and here in Florida have vibrant transportation industries without imposing any type of similar rule. Consequently, it is clear that the minimum fare rule is totally unnecessary and benefits only politically favored taxi or limousine companies that don’t want to compete with other businesses based on price.

The PTC has also violated the Florida Constitution in a second way. The PTC only enforces the minimum fare rule against limousines, but not against taxis or even luxury taxis, which are similar in many ways to limousines. Therefore, the PTC has violated the Equal Protection Clause found in Article I, Section 2 of the Florida Constitution. In fact, the equal-protection violation illustrates the absence of any legitimate public safety justification for the minimum fare rule. Luxury taxis offer many of the same services as limousines, and if the minimum fare rule had any legitimate public safety justification, then the PTC would want to enforce it against all similar businesses. But it does not. The reason is simple—the minimum fare rule has no purpose other than to protect large taxi and limousine companies from competition by smaller competitors.


Legal Team

The Institute for Justice is the national law firm for liberty.  IJ’s legal team in Thomas Halsnik, Black Pearl Limousines LLC, Kenrick Gleckler and Daniel Faubion v. Hillsborough County Public Transportation Commission and Victor Crist is led by IJ-Florida Chapter Executive Director Justin Pearson.  Pearson is joined by IJ Attorney Ari Bargil.


The Institute for Justice: A History of Protecting Economic Liberty

The Institute for Justice is a public interest law firm that advocates for a rule of law under which individuals can control their own destinies as free and responsible members of society. Through litigation, communication, outreach and strategic research, IJ secures protections for individual liberty and extends the benefits of freedom to those whose full enjoyment of their rights has been denied by the government.

The Institute for Justice is headquartered in Arlington, Va., and has state chapters in Arizona, Florida, Minnesota, Texas and Washington, as well as the Institute for Justice Clinic on Entrepreneurship at the University of Chicago Law School. The Florida Chapter is located in Miami.

The Institute for Justice has secured numerous victories for economic liberty, including:

Clayton v. Steinagel—In April 2011, the Institute for Justice filed a federal lawsuit on behalf of an African hairbraider challenging barriers to competition created by Utah’s cosmetology licensing scheme. In August 2012, the U.S. District Court for Utah struck down the barriers to competition as unconstitutional.

St. Joesph Abbey, et al. v. Castille, et al.—In August 2010, the Institute for Justice teamed up with the monks of the Saint Joseph Abbey to challenge the constitutionality of Louisiana’s requirement that the monks must be licensed as funeral directors in order to sell their handmade wooden caskets. The Institute won at the trial court level and again in front of the U.S. Court of Appeals for the Fifth Circuit. Louisiana recently filed a petition asking the U.S. Supreme Court to hear the case.

Swedenburg v. Kelly—In May 2005, the Institute for Justice won an important economic liberty case before the U.S. Supreme Court, striking down a protectionist law that granted monopoly power to distribute wine to large, politically connected liquor wholesalers.

Clutter v. Transportation Services Authority—In 2001, the Institute for Justice defeated Nevada’s Transportation Services Authority and its entrenched limousine cartel that had stifled competition in the Las Vegas limousine market.

Jones v. Temmer—In 1995, IJ helped three entrepreneurs overcome Colorado’s protectionist taxicab monopoly to open Denver’s first new cab company in nearly 50 years. The IJ victory inspired other municipalities to break open their government-sanctioned taxicab monopolies in Indianapolis, Cincinnati and Minneapolis.

For more information contact:

John E. Kramer
Vice President for Communications
Institute for Justice
901 North Glebe Road, Suite 900
Arlington, VA 22203-1854
Phone: (703) 682-9320 ext. 205
jkramer@ij.org




 

[1] See City of Tampa Official Website: http://www.tampagov.net/information_resources/user_guides/for_visitors.asp.

[2] Available at: http://www.hillsboroughcounty.org/DocumentCenter/View/6827.

[3] See Chapter 2001-299 of the Laws of Florida, available at: http://www.hillsboroughcounty.org/DocumentCenter/View/6215.

[4] PTC representatives have admitted to members of the media that the minimum fare rule was enacted at the request of limousine and taxi companies, see, e.g., Drew Harwell, “Uber Runs into Friction with Local Regulators,” HispanicBusiness.com, August 29, 2012,  available at: http://www.hispanicbusiness.com/2012/8/29/uber_runs_into_friction_with_local.htm.  PTC representatives have also admitted that the minimum fare required was raised “at the request of the limousine industry.” Elizabeth Flock, “No One Wants to Take Credit for Uber’s $50 Minimum in Tampa,” US News & World Report, August 24, 2012, available at:  http://www.usnews.com/news/blogs/washington-whispers/2012/08/24/no-one-wants-to-take-credit-for-bers-50-minimum-in-tampa.

[5] See Report 99-12 of the Florida Legislature Office of Program Policy Analysis and Government Accountability, available at: http://www.oppaga.state.fl.us/reports/pdf/9912rpt.pdf.

[6] See, e.g., Chicago Title Ins. Co.  v. Butler, 770 So. 2d 1210 (Fla. 2000) (striking down anti-rebate statute).

[7] See Hillsborough County Public Transportation Commission website: http://www.hillsboroughcounty.org/index.aspx?NID=2595See also, Chapter 2001-299 of the Laws of Florida, available at: http://www.hillsboroughcounty.org/DocumentCenter/View/6215.

 


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