Who Will Win? Portland’s Taxi Protectionism Versus the Right to Earn a Living

Cascade has been involved in helping deregulate Portland’s transportation network since we helped open the taxi market in the mid-1990s. At that time, the City Council was persuaded in part by a winning entry in our Oregon Better Government Competition from the libertarian public interest law firm Institute for Justice to expand the market from four cab companies to six.

Now, we are working with the Institute for Justice again supporting its federal lawsuit against the city for trying to fine two local companies, Towncar.com and Fiesta Limousine, a total of $895,000 for daring to offer $32 discounted rides to the airport through Groupon.com. The city also threatened to revoke both businesses’ permits to operate in Portland. The companies withdrew the offers, and the city withdrew its heavy-handed threats.

You see, in 2009 Portland enacted regulations requiring such companies to charge at least $50 for rides to the airport from downtown, and charge at least a 35% premium for any other trips. The city also requires that passengers wanting rides from such companies wait at least an hour to be picked up for any trip. All to protect the taxi industry from competition at the expense of the public.

Attending the June 19th federal court hearing on the case, I watched the city’s attorney argue that such regulations were somehow needed to maintain a transportation network that offers affordable rates for all citizens any time of the day or night. He argued that the suit should be dismissed because the city didn’t actually put Towncar.com and Fiesta Limousine totally out of business—it just threatened to do so.

Amazingly, the very next day the judge dismissed the case and issued a 19-page ruling in which he agreed with the city that because the companies weren’t put totally out of business, they couldn’t claim that their constitutional rights had been violated. Thus, the court conveniently didn’t even have to address the question of whether such regulations amount to economic protectionism for the taxi industry―an intention likely to be found unconstitutional if addressed by the courts.

In a statement issued after the case was dismissed, Institute for Justice attorney Wesley Hottot said, “A business does not have to go out of business in order to challenge the constitutionality of a law. We will appeal this ruling to the Ninth Circuit.”

Stay tuned to see if the right to earn an honest living eventually wins out over protectionism in Portland.

About Steve Buckstein

Senior Policy Analyst and founder.
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2 Responses to Who Will Win? Portland’s Taxi Protectionism Versus the Right to Earn a Living

  1. Bob Clark says:

    Cutting taxi costs would help tourism without cost to government, excepting maybe it reduces the government monopoly on mass transit. But if you are a tourist, you might enjoy visiting much more if you could inexpensively get door-to-door delivery with your own driver and car ride. There is also PDX airport parking, largely a government monopoly; maybe some loss there for the government monopoly. But ironically, local government is trying to reduce parking spaces, and raising the capacity utilization of our existing car fleet, would help reduce the need for parking. Cheap tax service would help do the latter, albeit probably fractionally.

    Of course, total tax deregulation could bring about mini bus door to door service, improving transit efficiencies.

    There is also Portland Commissioner Novick saying how he wants to improve all modes of local transportation. deregulation of taxi service sure would help this goal.

    Thanks, Cascade & Steve for working to liberalize local transportation alternatives.

  2. Neil Huff says:

    Ever lived in a country where there was no regulation of public transportation? India, Pakistan, Kenya, Guatemala… Liberia? Deregulation goeth before a fall. I find it fascinating to watch my country slowly deconstruct itself toward the kind of economic and regulatory free-for-all that exists in the Third World countries I worked in for 30 years. But I suppose that is fair enough since we are importing their populations. They do not actually leave their culture at home. The free-for-all will make them feel right at home.

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