By Wesley Hottot
For nearly four years, Ali Bokhari fought the Metropolitan Government of Nashville and Davidson County, Tenn., for the basic right to charge his customers lower prices. You read that right: Nashville required Ali and every other sedan operator in the city to charge at least $45.
Ali’s business, Metro Livery, provides luxury transportation at affordable prices. For example, a trip from downtown Nashville to the airport cost just $25 before 2010, when the minimum price went into effect.
Why would a government enact a minimum price? Simple. Ali’s competition—Nashville’s expensive limousine companies—wanted the minimum and they had the political influence to get it.
In fact, when the Institute for Justice joined forces with Ali and sued the city in federal court, we proved to a jury that the expensive limousine companies had written every word of the $45 minimum-fare law and that the government just rubber stamped the irrational policy. The jury nevertheless ruled for the government in January 2013 and Ali lost his case in court.
But the great thing about IJ and our clients is that we don’t accept defeat—we just see cases that aren’t victorious yet.
Ali never stopped fighting, and this January he won when Nashville’s Metro Council voted to reduce the $45 minimum fare to $9. In the transportation business, a $9 minimum price is effectively no minimum price.
The Council’s vote represents much more than a personal victory, however. Lower transportation prices help Nashville’s consumers, other transportation businesses and Nashville’s broader economy. Transportation businesses put people to work and take people to work.
In January and February, Ali’s business boomed beyond his wildest dreams. The pent-up demand for affordable luxury transportation meant that Ali had the best kind of problem: too much demand. He purchased five new vehicles in five weeks. He put drivers he had laid off because of the old law back on the road. For the first time in years, Ali had to run his business from behind the wheel of a sedan. And his grin stretched from ear to ear.
Nashville’s Metro Council ultimately did the right thing, but the minimum-fare law should never have been on the books. It is not the government’s place to run small businesses like Metro Livery off the road—and harm consumers too—just to help out their competitors. The fact that Nashville can repeal this law so easily only proves the point: The regulations never had anything to do with public safety but everything to do with economic protectionism.
Nashville spent three years fighting tooth and nail (and spending taxpayer money) to defend the $45 minimum fare but, happily, the public interest finally won out.
Nashville’s repeal of the minimum fare should send a message to every other trade association that seeks to use the power of government to limit competition and drive up prices. You might succeed for a time, but justice will find you in the end.
And this fight still isn’t over. IJ is currently challenging the constitutionality of similar minimum-fare laws in Portland, Ore., and Tampa, Fla. Just like Ali, we will not stop until these laws are off the books.
Weslet Hottot is an IJ attorney.