Taxi Deregulation Is On a Roll

by | Apr 9, 2016 | Price Controls, Regulation

The taxi lobby had called for everyone to be equally regulated. Instead, the commissioners made everyone equally free.

San Diego won a major victory in its bid to deregulate taxicabs. A California superior court judge ruled against a group of taxi companies seeking to prevent the city from issuing any new taxi permits. IJ intervened in the case to represent two taxi drivers who simply wanted to work for themselves.

In November 2014, San Diego removed its cap on the number of taxi permits that could be issued. The cap had artificially throttled the number of cabs that could operate on San Diego streets, driving up the price of permits and forcing drivers to lease them from cab companies at exorbitant rates. It served no purpose other than to enrich a small group of pre-existing taxi permit owners.

Lifting the cap gave hundreds of drivers a chance to employ themselves instead of paying out the nose just to work for someone else. But it also threatened the cab companies’ cartel, so they filed a baseless lawsuit that sought to stop the Metropolitan Transit System (MTS) from issuing any new taxi permits.

The companies argued that they have a constitutional right to be paid by the government for each permit issued to someone else. They dropped that ridiculous argument in June, but held on to a claim that California law required an environmental study before the new permits could be issued.

Wednesday’s ruling rejected that claim. Barring an appeal, the cab cartel’s lawsuit is out of gas. The MTS will issue new permits and San Diego taxi drivers will be free to work as their own bosses.

There’s also good news out of Florida. Last month, Collier County commissioners were trying to decide what to do about Uber, which was operating in the county in violation of local for-hire vehicle regulations. Taxi drivers were complaining that they faced competition from Uber drivers who weren’t playing by the same rules.

On October 27, Collier County addressed that discrepancy with a full deregulation. The taxi lobby had called for everyone to be equally regulated. Instead, the commissioners made everyone equally free.

Now, the only license you’ll need to run a car-for-hire is a driver’s license—special for-hire licenses are no longer required.

Once the changes go into effect, drivers, passengers, rideshare companies, and traditional cab companies will be able to work out their own insurance and safety policies based on what they actually need, not what commissioners think they need.

You’d think the county’s traditional taxi industry would be happy that they’re now on an even regulatory footing with Uber—and anyone else who wants to try his or her hand at the for-hire wheel. But perhaps their attachment to regulation has more to do with protecting themselves from competition than protecting the public safety.

With the 4-1 vote to deregulate for-hire drivers, Collier County followed in the tracks of Sarasota, which did so in September.

Let’s hope other local governments follow suit by knocking down their regulatory roadblocks, leaving eager drivers of all stripes free to serve Americans from coast to coast.


  1. Nice to see something positive. It seems that many Americans think freedom is great until it means their government – regulatory – force – based market advantage is threatened by real freedom. Then, good heavens, there should be a law or regulation to keep these other people from providing better products or services at lower prices.

    America’s future can not be bound by the vision of our bureaucrats. (They aren’t the smart ones.)

  2. True, except it’s not a ‘regulatory-force-based market’. It’s a culture of hostages forcibly held by a criminal regime by criminal plans. It’s a criminal regime that has infested, infected and displaced government by law in the given area of what was economic activity.

    But it’s great to see the examples cited by Mr. Mulley of the reverse, of government by law taking back the ground it lost to crime. Our rights come from our nature as human beings. Government by law protects our rights, in all areas of human action and human relations, from crime. That’s the ONE function of government. Government is limited to that function, and government’s size is limited by the size of that function. That function is always small in a culture where individual rights are protected under law, by government. Mike Kevitt

  3. I tend to agree with you as regards naming the government interference that directs market advantages by force, typically to those supporting the election interests or private financial interests of the government officials passing the regulation or new laws. It is criminal, as it violates the true conception of Law, as justice, or the prevention of injustice. I choose to phrase it as I do, primarily as a, hopefully, more persuasive stepping stone toward the correct view of the matter for those who have not considered the issue this way and would perhaps just dig in heals and shut down mind if confronted with the more aggressive phrasing you have suggested.

  4. I suppose you’re right about the way you choose to phrase it, when talking to most people about it. They need it fed to them, starting at the beginning, in steps they can take. They must be brought carefully to the full understanding and the right concepts and terminology (phraseology). Otherwise, that phraseology, before sufficient understanding, can scare people away forever. But, in due time they must reach enough understanding to accept and get used to that phraseology. And all this assumes any given person is at least tentatively willing to listen at the beginning. Mike Kevitt

    (If I can get away with a brief, off topic comment, it’s about our recent discussion about fractional reserve banking. I now see that demand deposits, usually checking accounts, require 100% reserve backing. But other accounts, like savings accounts and time deposits, can be backed by fractional reserves. Otherwise, you don’t have a bank. You have only a vault locking away money, like sewing your money away into your bed mattress.) Mike Kevitt

  5. I should note that when I am writing out ‘government force for market advantage,’ I am thinking “CRIME!”

    As regards the fractional reserve issue, I think the critical distinction hinges on whether the funds deposited in the bank are or are not immediately available. I think it unjust, and harmful by way of, essentially, counterfeiting, if funds are both loaned out and marked as immediately available for withdrawal by the depositor.
    There certainly could be a fee based ‘money store house’ sort of institution, and the services it could render, I do think people could find useful (even more so if money were Gold or some other durable divisible tangible commodity.) However, I do think the banking practice of pooling many people’s deposits (should be time based) and loaning to likely borrowers at interest is a useful tool for our economy, that does not steal from all other dollar holders.

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Walker Mulley is a Maffucci Fellow at the Institute for Justice


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