MacIver News Service | September 27, 2011[MILWAUKEE] The City of Milwaukee limits its number of taxicab licenses to 321, and the Institute for Justice is suing to have the cap removed.
“If you break that cap, they’re going to have competition from a lot more people,” said Anthony Sanders, attorney for the Institute for Justice. “It will take away their monopoly and high value of those permits.”
The Institute filed the lawsuit in Milwaukee County Court on Tuesday morning. It claims the cap results in a “taxi cartel” that holds a monopoly over the industry in Milwaukee, stifling competition and driving up rates.
The only way to currently get a taxicab permit in Milwaukee is to buy one from an existing taxi company. They charge $150,000 for one.
People who drive for Milwaukee’s cab companies pay a weekly rental fee, which can cost as much as a thousand dollars a week. One former driver who is working with the Institute said he only took home $15,000 the last year he drove a cab.
Sanders anticipates a hard fight from the city over this issue that could last a couple years.
“Cities don’t usually like being told what to do,” Sanders said. “[But the main] resistence is going to come from existing taxicab owners. They basically have a cartel over existing drivers.”
The Institute for Justice has previously been successful in removing the taxicab cap in Minneapolis, and believes it will also prevail in Milwaukee.
Right now there is only 1 taxi for every 1,850 residents in Milwaukee, and Sanders sees potential for public pressure there. Also, even though the licenses sell for $150,000, the city only sees $175 for the transfer fee. Because the city does not make any money off of the cap, Sanders sees potential for change there as well.
“We’re confident through either the court of law or the court of public opinion, we will get this changed this,” Sanders said.
The City of Milwaukee has 45 days to respond to the lawsuit.