Fighting for the Freedom to Drive in the Windy City

June 4, 2014

In 1993, IJ launched its first transporta- tion lawsuit in Denver, Colo., on behalf of a group of entrepreneurs who wanted to open up the taxi market and start their own company. Since then, IJ has been devoted to the idea of transportation freedom: The basic idea that consumers and entrepreneurs, not government officials, should be the ones deciding what transportation options are available in a particular city. From taxicabs to dollar vans and black cars, we’ve taken on entrenched monopolies all across the country. In the past year, we’ve redoubled our commitment to the cause, launching a case in Tampa and securing an important Supreme Court victory in Colorado.

And now we can add the Windy City to that list with our latest intervention in a federal lawsuit in Chicago. For the past year, Chicago has allowed “ridesharing” services to operate in the city. Ridesharing companies like Sidecar, UberX and Lyft use smartphone technology to match consumers with ordinary drivers who can transport them for a fee. The experiment seemed to be working—drivers were making money and consumers were having good experiences—until a group of large taxicab companies filed a lawsuit claiming that Chicago was committing an unconstitutional taking by not arresting ridesharing drivers. The lawsuit did not allege that Chicago was actually taking anything from the companies; the city is not taking their cabs away or revoking their medallions. Instead, the cab companies’ shockingly broad legal theory is that Chicago is commit- ting a taking by allowing other businesses to compete with them.

But that cannot be right: Customers aren’t property, and competition isn’t theft. If the taxicab companies’ legal theory prevailed, it would be the death knell of any meaningful transportation reform anywhere in the country. Not only would taxicab companies be able to prevent ridesharing using smartphone apps, they’d be able to prevent any reform that resulted in them making less money.

Faced with this threat, IJ’s transportation team swung into action with amazing speed. Within hours of the lawsuit being filed, we were on the phone with ridesharing groups and drivers in search of potential clients. Within days, IJ Attorneys Anthony Sanders and Renée Flaherty were on the ground in Chicago, meeting with the ridesharing drivers who were directly affected by the lawsuit. And within weeks, we formally intervened in the lawsuit to make sure that the possibility of transportation reform remains alive and well not just in Chicago, but nationwide. While the litigation team was moving to make sure our voice was heard in court, IJ Clinic Director Beth Kregor swung into action on the legislative front, working to make sure protectionist legislation did not shut down these innovative businesses before they started. The team effort resulted in a major media splash—and it will make sure the cab companies’ lawsuit does not result in a legal ruling setting up a permanent monopoly.

As technology continues to change the transportation landscape, this kind of speedy reaction will only grow more important. And IJ will stand ready with the resources, the experience and the principles that are necessary to make sure economic liberty does not disappear as soon as someone gets behind the wheel.

Bob McNamara is an IJ senior attorney.

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