March 2002

Driven To Succeed: IJ Client Ed Wheeler Launches Limo Business After Legal Victory

By Clark Neily

Visit Ed Wheeler’s website (www.omnilimo.com) and you begin to understand why the Las Vegas limousine cartel spent hundreds of thousands of dollars trying to keep him out. Ed’s website is a reflection of his business ethic: it is classy, innovative and—above all—totally focused on customer service. By contrast, the fat-cat limo cartel members have shown time and again that they are far more interested in courting bureaucrats than customers. The industry is populated by rent-seekers like Star Limousine, which opposed Ed’s latest limo application on the grounds that its own failure to turn a profit meant the Vegas market was ?saturated? and should be closed to newcomers. Of course, all that red ink hasn’t kept Star from spending big bucks to exclude potential competitors like Ed. (Memo to Star Limousine: Want to make a profit? Try spending less on lawyers and more on business development.)

As readers of Liberty & Law know, IJ won a major victory last spring when a judge ruled that our clients’ due process rights had been violated by the agency that oversees limousine licensing in Nevada. The judge criticized the Transportation Services Authority (TSA) for allowing big limousine companies to effectively take over the licensing process and force applicants to choose between accepting severe restrictions on their operating authority or being “run to death in the paper mill” of a contested application proceeding.

Unfortunately, the judge declined to issue an injunction and instead left the TSA to put its own house in order. That meant someone had to step up and run the regulatory gauntlet to make sure the TSA had gotten the message.

Ed Wheeler stepped up.

Shaking off bitter memories of his first encounter with the TSA, Ed applied again. It looks like the TSA has begun to take its duties more seriously. Unlike times past, the TSA did not tell Ed to cut a deal with intervening limo companies, nor did it permit them to crank up the “paper mill” to its usual fevered pitch. And it even appears the TSA is beginning to understand that the use of “dueling experts” to show whether a new applicant will have an “unreasonable and adverse effect” on existing companies is a stupid and meaningless charade. Although it cost him more money and aggravation than it should have, Ed got his limo license. It was a remarkable accomplishment after a monumental battle.

For more than 25 years, the most lucrative limousine market in the world languished in the stranglehold grip of a tiny, well-connected cartel. Now that the market is open to hungry newcomers like Ed Wheeler, we predict lean times ahead for the fat cats of Las Vegas.