Taxi Freedom Prevails in Milwaukee

J. Justin Wilson
J. Justin Wilson · December 8, 2015

Milwaukee—Yesterday afternoon, Judge Lynn Adelman dismissed a lawsuit that threatened to undermine the city of Milwaukee’s recent taxi reforms. The lawsuit, which was filed by a group of taxi cab conglomerates, sought to recoup tens of millions of dollars in supposed damages from the city after it lifted its unconstitutional cap on taxi permits. Barring an appeal, the court’s dismissal puts an end to the cab companies’ last-ditch attempt to deny taxi drivers of their right to earn a living.

“This is hopefully the final victory for Milwaukee taxi drivers,” said Anthony Sanders, a senior attorney in the Minnesota office of the Institute for Justice (IJ), a public interest law firm. “The cab companies’ lawsuit was a desperate attempt to derail a hard-fought victory. Now, all taxi entrepreneurs can enjoy the freedom to own and operate their own cabs in Milwaukee.”

The cab companies’ lawsuit claimed that their taxicab permits, which they obtained under the city’s former protectionist system, were tantamount to property. But Judge Adelman disagreed and dismissed the claim, writing: “Because the City has always maintained control over the permits, plaintiffs at best had a unilateral expectation that the City would not diminish the market value of the permits.”

The cab companies had also brought state law claims, which the judge similarly dismissed. Judge Adelman cited an earlier lawsuit in Minneapolis, where the Eighth Circuit Court of Appeals had upheld the city of Minneapolis’ deregulation of the taxicab market.

Two independent cab drivers, Jatinder Cheema and Saad Malik, intervened in the lawsuit to defend the right of all taxi entrepreneurs to earn a living driving their own taxis in Milwaukee. Cheema was also a plaintiff in the original lawsuit that resulted in the city’s removal of its taxi cap.

“The city’s new law has given drivers like myself the freedom to start our own taxi businesses,” said Cheema. “I’m happy we were able to defend this positive change in the law.”

The new law requires that taxis comply with health and safety requirements, such as inspections and insurance coverage. It has also opened the market to ride-sharing services, allowing companies like Uber and Lyft to operate in the city.

“Milwaukee’s new ordinance is a model of transportation deregulation that other cities should follow,” said IJ attorney Meagan Forbes. “Milwaukee’s success is proof that taxi freedom is nothing to fear.”

The Institute for Justice has helped free taxi markets in cities across the country, including Denver, Indianapolis, Cincinnati and Minneapolis, and for more than 20 years has been the nation’s leading advocate for the rights of entrepreneurs.