A year or so ago, we had a piece here at the Hayride about a project the Institue for Justice is engaged in – namely, to fight for the right of limousine drivers to compete in the public marketplace against a largely corrupt and over-regulated taxi industry.
IJ’s work has centered on Portland and Nashville, and their case in Portland is set for trial in August of next year.
We noted that New Orleans is an excellent venue for future exploits by the free-market advocacy law firm given the spate of onerous taxi regulations that city’s mayor Mitch Landrieu engaged in last year…
In New Orleans, a similar law is in place. In fact, it’s even worse. Ordinance § 162-841(a)-(b) in the city’s code requires a $120 minimum fare for limousines and $105 for sedans, rates which are even worse than those in Portland or Nashville. In fact, of the 10 local ordinances aimed at restricting competition from livery services to the taxi business IJ found, the Crescent City was the worst of the bunch.
And the over-regulation isn’t getting better. Just last week, a sweeping overhaul of the taxi business in New Orleans, which has been considered a failure and a “dissatisfier” for Crescent City tourists, laid on what looks like a rather oppressive new regulatory regime.
A CPNC is a Certificate of Public Necessity and Convenience, and you’ve got to have one if you want to operate a cab in the city. The number of CPNC’s issued in New Orleans is currently capped at about 1,550, and until recently they were allowed to be bought and sold on a secondary market for as much as $65,000 – meaning that the taxi business has begun to be controlled by some questionable characters of former-Soviet extraction with ties to places like Chicago and New York rather than the independent entrepreneurs one would hope would dominate the industry.
The equivalent of a CPNC in New York, by the way, goes for well over a million dollars. Not exactly a healthy industry there, which leads to a proliferation of “gypsy” cabs in that city and mass chaos. Something similar exists in the Big Easy on a smaller scale.
One would hope that IJ’s lawsuits in Portland and Nashville could send a shock through the industry nationally and somehow move the needle in New Orleans. IJ has had success in this business thus far – legal actions it has taken in Minneapolis and Denver, for example, have led to an opening of the transportation-for-hire markets in those cities, and IJ approaches to mayors in Indianapolis and Cincinnati have led to their voluntarily opening the markets. John Kramer, who is IJ’s Vice President of Communications, noted this morning that since deregulation in those two cities there are now more independent owners of cabs there, more women owners, more minority owners and a healthier industry.
They’ve had deregulated cabs in Indianapolis since 1994. As an aside, the author was there in 2006 for the Final Four and the cab service (three rides, all in independently-owned cabs with the proprietor driving the car) was the best I’ve ever had – a significant improvement over what’s typically on offer in New Orleans.
And in other cities, a web-app service called Uber has been serving as a lead generator for limo services and earning a sizable fan base among people willing to pay for the convenience and comfort a limo service can provide above and beyond what the overregulated and oligarchical taxi industry can – with predictable pushback from local regulators.
But since it’s pretty clear that the politicians in charge of New Orleans won’t be deregulating the taxi industry, it’s probably hopeless to expect they’ll lower the regulatory minimums on livery service rates either. And that means IJ has a potentially fertile territory in the Crescent City for finding a client to attack the restrictive and unconstitutional – and failed, let’s not forget that – regime in that town.
Today is a good day to remind our readers of that post, because yesterday we got to see just how oppressive the Landrieu City Hall wants to be about controlling the transportation-for-hire market in New Orleans. WDSU-TV covered Landrieu’s Taxi Cab Bureau chief Malachi Hull and his exploits in trying to protect the public from the evils of Uber…
[T]he WDSU I-Team has learned that a high-ranking city leader has threatened a multibillion-dollar transportation company with arrest and fines if they dare try to bring their business to the city.
The company, Uber, is no small operation. It operates in cities like Honolulu, Oklahoma City and beyond.
One state official is calling the ban the biggest anti-business move he’s ever seen.
The app-based business operates in 40 American cities and in 20 foreign countries.
The company told WDSU that it wants to bring their service to the Crescent City, but it appears the city’s taxi cab director wants to prevent that from happening.
Public Service Commissioner Eric Skrmetta said while he’s been trying to get Uber in New Orleans, the city is trying to keep the company away.
A letter obtained by the I-Team was sent last month from the head of the city’s Taxi Cab Bureau, Malachi Hull, to Uber President and Founder Travis Kalanick.
The letter orders Uber to “cease unlawful transportation operations” in New Orleans, and went on to say “failure to do so will result in further action being taken, such as, civil fines and/or imprisonment.”
“Uber is a service in virtually in every major city in the U.S. and Europe,” Skrmetta said. “I though it was one of the most anti-business moves I’ve ever seen.”
Uber isn’t operating in New Orleans. A company representative said it’s the first time in Uber’s four-year history it received a cease-and-desist letter from a city where it isn’t actually providing a service.
Uber has only posted job wanted ads on its website, looking for potential drivers in the area.
Hull’s letter went to Uber and to New Orleans Police Department Superintendent Ronal Serpas and the head of the Louisiana State Police, Mike Edmonson.
Here’s hoping Skrmetta wins his fight to bring Uber in. In the big cities where the company operates, riders swear by the quality of its service and the convenience of its app. It’s a 21st-century solution to urban transportation, and New Orleans’ taxi-cab industry, which lots of people will tell you is actually controlled by the Russian mob, and even perhaps with Landrieu’s assent, could use the overhaul Uber’s competition would necessitate.