Final Victory for Ridesharing Drivers in Chicago

J. Justin Wilson
J. Justin Wilson · April 24, 2017

Washington, D.C.—Today, the United States Supreme Court declined to hear taxi companies’ appeal of a groundbreaking decision issued last October by the 7th U.S. Circuit Court of Appeals. The Court’s decision not to hear the case finalizes an important victory for transportation freedom all across the country and solidifies the ability of cities to sweep aside outdated protectionist transportation regulations in order to make way for new entrepreneurs.

“Today’s decision makes clear what the Institute for Justice has said for years,” explained IJ Attorney Renée Flaherty. “The Constitution does not require governments to stick with outdated protectionist regulations in the face of technological innovation.”

The lawsuit was brought by Chicago taxicab companies upset that new regulations governing ridesharing and medallions allowed greater competition and disrupted their longstanding monopoly power. Taxicab operators sued the city for permitting ridesharing services like Uber and Lyft to operate and argued that city officials’ refusal to arrest ridesharing drivers violated the taxicab owners’ rights under federal and state law.

The Institute for Justice, which has litigated on behalf of transportation entrepreneurs nationwide for decades, represented ridesharing drivers who intervened in the lawsuit to make sure that their competitors did not succeed in using the courts to roll back this new expansion of economic liberty. The case came down to the legal question: Are cities allowed to remove outdated barriers to entry without first paying off an incumbent monopolist? The 7th U.S. Circuit Court of Appeals answered with a resounding yes. The same day, in another IJ case, the 7th Circuit also upheld Milwaukee’s lifting of a longstanding cap on the number of taxicabs the city would allow to operate. The plaintiffs in that case did not ask the Supreme Court to hear their case.

The fact that the U.S. Supreme Court will not hear the case means that IJ client Dan Burgess, a ridesharing driver, can celebrate a final victory. “Chicago taxi owners were taking consumers for a ride, but now I know that the courts will not stand for it,” he said.

“The Court’s decision has cleared the way for transportation freedom across the country,” said Institute for Justice Senior Attorney Anthony Sanders, who represented Mr. Burgess and other ridesharing drivers. “In city after city, we are seeing lawsuits like these filed by incumbent businesses that want to freeze the current regulatory environment in amber. And these lawsuits, rightly, are failing. Consumers and entrepreneurs, not lawyers and bureaucrats, should decide what transportation options are available, and the Institute for Justice will continue fighting to make sure that is true nationwide.”