Tuesday, October 30, 2007

A win for economic liberty in Minneapolis 

We spoke in August on the Final Word with Lee McGrath and Scott Bullock of the Institute for Justice about their case defending a Minneapolis City Council decision to end the use of entry restrictions into the Minneapolis taxi market. The case was in court because existing members of the taxi cartel argued that changing the regulation and removing the restriction was a regulatory taking. IJ reports that they have won a ruling from the magistrate.
Can an entrenched cartel of Minneapolis taxi drivers violate the civil rights of entrepreneurs and consumers?

No, according to U.S. Magistrate Judge Franklin L. Noel. In an opinion released today, the judge recommended that a lawsuit brought by members of the taxi cartel to overturn the city�s free-market reforms be dismissed.

In his opinion, Judge Noel determined: �The [established] taxi vehicle license holders do not have a constitutionally protected freedom from competition.�

Taxicab regulation has long been seen by economists as an entry barrier protecting cab cartels. Here and in Canada, such regulations make it difficult for the poor who want to travel to places inconvenient by bus. (Here's a survey of the literature.) In St. Cloud, one of the most frequently cited problems for people with modest or low incomes is the lack of public transportation; yet we have had a system that has prevented immigrants from even holding a license. While St. Cloud has a pretty good bus system, there are still places of work that would be difficult for the car-less to get to regularly. ("I used to walk to work, in the winter, in the snow, uphill, both ways." Yeah, I hear you.) If cabs were to operate freely in the city, could workers find better jobs off the bus routes, get their children to child care more easily, and get to cheaper grocery stores for food? It might be worth the effort.

Labels: , ,