IJ Renews Legal Fight to Open Denver Taxi Market

John Kramer
John Kramer · October 27, 2011

Arlington, Va.—They’re baaaaack. More than 18 years after filing a lawsuit that opened Denver’s decades-long closed taxi market, which led to the launch of Freedom Cabs, the Institute for Justice announced today it is returning to Denver to litigate once again on behalf of a would-be taxi driver who seeks nothing more than the right to earn an honest living. IJ is a public interest law firm that represents government-harassed would-be entrepreneurs nationwide.

Today, IJ filed an appeal to the Colorado Supreme Court on behalf of Mile High Cab, Inc., a new taxi company that has fought for three years for legal permission to enter the Denver market. Through its litigation and activism, IJ has helped open taxi markets in Denver, Cincinnati, Indianapolis and Minneapolis. It is currently litigating a similar challenge in Milwaukee.

“IJ has fought for taxi freedom for more than 18 years,” said Institute President and General Counsel Chip Mellor. “That work started in Denver, where we helped Freedom Cabs fight its way into Denver’s closed market. We’re glad to be back in Denver fighting for even more economic liberty for taxi entrepreneurs.”

To operate a taxi business in Denver, company owners must first obtain a “certificate of public convenience and necessity” from the state’s Public Utilities Commission. Before granting a certificate, the commission must determine that a new company is financially fit, operationally fit and that there is a public “need” for new taxi service. To make matters worse, existing taxi companies may intervene in the proceedings, which amount to a full-blown trial over whether a city has “enough” taxi businesses.

“The riding public and would-be entrepreneurs—and not the government or existing businesses—are in the best position to decide if Denver needs a new taxi service,” said IJ Staff Attorney Robert McNamara. “Colorado’s public convenience and necessity standard allows existing businesses to veto competition. It is like allowing Burger King to decide whether Denver needs more McDonalds. It is a system designed to keep out competition, which hurts both riders and aspiring entrepreneurs.”

In 2008, however, Colorado changed its laws to allow more competition in Denver’s taxi markets, instructing the commission to presume that there was a public need for new taxi businesses as long as it found an applicant was otherwise fit. Despite this change in the law, the commission refused to allow Mile High Taxi to start its business, even though it found the company both operationally and financially fit to provide service in Denver. Mile High appealed that ruling, and has been fighting in court ever since.

“Having the Institute for Justice representing us is incredibly exciting after such a long fight,” said Rowland Nwankwo, the president of Mile High Cab, who was also one of the original litigants when IJ first filed suit to open Denver’s market. “I am confident that we will win our fight for taxi freedom.”

“Starting a taxi business is an excellent way for a would-be entrepreneur to get started: It doesn’t take much capital, and it doesn’t take much formal education,” Mellor said. “But the Public Utilities Commission is trying to take that opportunity away from Denver’s taxi entrepreneurs. We’re going to put a stop to that.”

Prof. Thomas D. Russell, J.D., Ph.D. represented Mile High Cab before the Public Utilities Commission and serves as local counsel.