Thanks to entrepreneurial successes like Uber, Lyft, Sidecar, and (if you’re in Boston) Bridj, most people think of ridesharing apps when they hear about changes in transportation innovation. But two of the Institute for Justice’s most recent economic liberty cases show exciting things are happening in the industry beyond ridesharing.
John Rinaldi is a serial entrepreneur who started Green Cab in Athens, Ohio, in 2012. Armed with a fleet of low-emission Toyota Priuses and state-of-the-art dispatching technology, Green Cab provides rides for just $6 a head in the small college town ($3 near campus). After successfully employing thirty drivers in a dozen vehicles, Mr. Rinaldi sought to introduce Green Cab to Bowling Green, Ohio, in what he hoped would be the first of many expansions into other college towns.
When Green Cab submitted their application for a taxi permit, however, a city employee literally laughed at them, informing them that Bowling Green had a limited number of taxi permits, and that applying for one was a waste of time and money. “I’ve been in a lot of businesses,” Rinaldi said at the time, “but never one where the government just said, ‘Nope, we have enough of those.’”
Thankfully, just months after Rinaldi teamed up with the Institute for Justice to challenge Bowling Green’s unconstitutional law, the city voted 5-0 to repeal their taxi permit cap. Rinaldi looks forward to opening up shop in Bowling Green within the next few months.
Unsurprisingly, Bowling Green residents actually do need Green Cab. Before Rinaldi’s legislative victory, Bowling Green limited its number of taxi permits to just one for every 2,000 residents, or 16 for the entire city. (For comparison, Washington, D.C.—which has no cap—has 24 taxis per 2,000 residents.) Almost half of those 16 permits were claimed by the city’s slow and inefficient shuttle service. In any case, if Bowling Green residents really didn’t need another taxi cab service, the city certainly didn’t need a law to keep one from revving up.
IJ is also litigating for taxi freedom in California, where forces more nefarious than bureaucratic inertia are attempting to stifle competition. In San Diego, the local taxi lobby is suing the agency responsible for administering the city’s taxi policy, demanding they reinstate an archaic and anticompetitive licensing cap, which was just lifted last November. The taxi cartel is attempting to shut out new competition by tying up the reforms in an environmental lawsuit that even the judge has ruled unlikely to succeed.
Caught in the crossfire are Abdi Abdisalan and Abdullahi Hassan, two would-be transportation entrepreneurs. Immigrants who came to this country in pursuit of the American Dream, Abdi and Abdullahi are trying to start their own low and zero-emission taxi businesses. Reinstating the license cap would deprive them and many others of their right to economic liberty, to the detriment of San Diegans and the benefit of the taxi lords. That is why IJ has intervened in the case, representing the interests of independent drivers whose shot at entrepreneurship depends on leaving the number of licenses uncapped.
Just as in Bowling Green, Ohio, there is obvious need for Abdi and Abdullahi’s businesses. When San Diego threw out its taxi cap last year, over 1,000 drivers applied for permits.
It is not the government’s job to decide when there are enough businesses of any kind. Not only are government officials much less capable of matching supply and demand than entrepreneurs and customers themselves, but the Constitution prohibits the government from unreasonably interfering with an individual’s right to earn an honest living.
Nobody has the right to use the government to protect themselves from competition, and the government can’t throw up arbitrary stop signs in front of entrepreneurs. It bears reminding that caps on taxi licenses don’t just harm individual entrepreneurs and their customers; they hurt society as a whole by standing against the tide of economic progress. If you’re a transportation entrepreneur and have run into illegitimate government interference, IJ wants to hear about it! Get involved and help end the cab caps and restore this nation’s promise of economic liberty for all.
For more information on these cases, please see IJ’s pages on Green Cab v. City of Bowling Green and San Diego Transportation Association vs San Diego Metropolitan Transit System.
— Josh Jones
Josh Jones is a Maffucci Fellow at the Institute for Justice.