March 31, 2016

For the past 25 years, IJ has been at the forefront of transportation freedom, from opening up taxi markets in Denver, Cincinnati and Milwaukee to representing ridesharing drivers in Chicago. At the same time, we have worked tirelessly to find and strengthen unique provisions in state constitutions that provide even greater protection for individual liberty than the U.S. Constitution does. Both of these long-term fights are bearing fruit in our latest transportation case in Little Rock, Arkansas. Little Rock has only one taxi company and it is illegal to start a second one. City law actually requires would-be taxi companies to prove that they will not harm the bottom line of the local taxi monopoly before they can receive permission to operate—a test that, unsurprisingly, nobody has passed.

This is unconstitutional. That is why, in March, IJ teamed up with a Little Rock taxi driver to challenge the law in state court.

After eight years working as a driver for Yellow Cab, Little Rock’s only taxi company, Ken Leininger decided to start his own business. Confident he could deliver a better experience for customers and drivers alike, he founded Ken’s Cab and got ready to out-compete the monopoly.

Ken did not know that the city of Little Rock made that illegal.

Unaware of the city’s monopoly setup, Ken applied for Little Rock taxi permits for his new business early last year. The city’s Fleet Services Department reviewed his application and determined that he met all the legal requirements, except one: the rule against competing with Yellow Cab. When Yellow Cab objected to his application, Fleet Services denied it. Stunned, Ken appealed the decision to the Little Rock Board of Directors. When the Board heard Ken’s appeal at its meeting in October, Fleet Services again admitted that Ken met all the other requirements. Some board members even voiced concern over the fact that Little Rock had created a monopoly, but Yellow Cab’s owner asked the Board to reject Ken’s appeal. And the Board did exactly that.

Like most entrepreneurs, Ken was not going to give up easily, especially when he felt that consumers—not the government—should decide whether a new taxi business is necessary. So he teamed up with IJ to end the Little Rock taxi monopoly.

Little Rock’s government-made taxi monopoly is not only wrong and anticompetitive, it is also unconstitutional. The Arkansas Constitution, like many state constitutions, expressly protects Arkansas citizens from the establishment of monopolies and declares government-created monopolies “contrary to the genius of a republic.” Revitalizing that protection will not only mean the end of Little Rock’s taxi monopoly, it will also mean greater protection for entrepreneurs statewide.

By challenging the taxi monopoly under the Arkansas Constitution, we will continue IJ’s battle for transportation freedom around the country. In so doing, we will allow entrepreneurs like Ken to drive their own way, free from excessive government regulation.

Allison Daniel is an IJ attorney.

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