Professor Mark J. Perry's Blog for Economics and Finance
Thursday, April 26, 2012
Cartel-Buster Institute for Justice Goes Up Against the Portland Taxi Cartel with A Legal Challenge
Portland, Ore. -- "Can the government protect you from cheap fares and innovative service merely to shield politically connected businesses from competition?
That is the question the Institute for Justice and its clients want answered in a federal lawsuit filed today in Portland, Ore, in the U.S. District Court for the District of Oregon. Their lawsuit challenges the constitutionality of Portland's limousine and sedan regulations, which punish small limo and sedan companies that offer discounted rides through online deal sites like Groupon.com.
In 2009, the city passed a law requiring a $50 minimum fare for limousine and sedan rides to or from Portland International Airport. The law imposes a city-wide minimum fare that requires limos and sedans to charge at least 35 percent more than what taxis would charge for the same route and imposes a minimum wait time of at least one hour before customers can be picked up.
"These laws amount to nothing more than naked economic protectionism; they are designed to protect the profits of Portland's taxicab companies, and now they are being enforced at everyone else's expense," said Institute for Justice Attorney Wesley Hottot, which represents the plaintiffs. "Portland's minimum-fare law and minimum wait time have nothing to do with protecting the riding public. They have everything to do with protecting the city's taxicab companies from competition and driving up prices for consumers."
Portland's Revenue Bureau recently targeted two limo and sedan companies—Towncar.com and Fiesta Limousine, both of which joined IJ to file suit against the city—for offering promotional fares on the daily deal website Groupon.com. When the companies offered their customers $32 one-way trips to the airport, city enforcers immediately threatened them with a combined $895,000 in fines and suspension of their operating permits. The companies canceled the promotions and refunded their customers."
Watch video above for an overview of the case.
MP: Kudos to the Institute for Justice for its ongoing
"cartel busting" efforts on behalf of small business owners in America. There is probably no other organization
anywhere in the entire world that is doing greater work defending small
businesses and entrepreneurs against economic protectionism, empowering
individuals to earn an honest living, and promoting economic and