Institute for Justice · December 7, 2016

Little Rock—Late today, Arkansas taxi driver Ken Leininger scored a sweeping victory in his constitutional challenge to Little Rock, Arkansas’ longstanding taxi monopoly. Judge David Laser—sitting in the Pulaski County Circuit Court—ruled from the bench that Little Rock’s city code violated the Arkansas Constitution, which prohibits the government from creating this sort of anticompetitive monopoly.

In March 2016, Leininger, who owns and operates Ken’s Cab in North Little Rock, teamed up with the Institute for Justice to file a lawsuit against the city of Little Rock, claiming that a city law forbidding the issuance of new taxi permits had granted an unconstitutional monopoly to the city’s only taxi company, Yellow Cab.

“Ken Leinginer just wants to compete. That is all,” said Institute for Justice Senior Attorney Justin Pearson, who argued today’s case. “He is pursuing his version of the American Dream, and today’s ruling confirms that the Arkansas Constitution protects his right to do so.”

Under the old law, Little Rock prohibited any new cab companies from competing with its one existing company, Greater Little Rock Transportation Services, LLC (Yellow Cab), by allowing new taxi permits to be issued only if “public convenience and necessity” left no other choice and if doing so will not harm the existing permit holder. In other words, a newcomer to the Little Rock taxi market would need to obtain arbitrary approval from the city government and get permission from their competitor. That provision had prevented Ken Leininger from offering his services in Little Rock, even though the city’s own Fleet Services office had determined he was otherwise able to meet all of the city’s health-and-safety requirements.

Under today’s ruling, Ken (and anyone else who wants to compete in Little Rock) will be able to secure taxicab permits without first proving that they will not take business away from their competitors.

“In cities and states across the country, courts and legislatures are increasingly rejecting protectionist rules like Little Rock’s,” concluded IJ Attorney and co-counsel Allison Daniel. “Today’s ruling is a victory not just for entrepreneurs and consumers in Little Rock, but a victory for transportation freedom nationwide.”