Here’s a question, in times of struggling businesses and high unemployment, that should concern everyone: What to do about oppressive regulations and crony capitalism in Milwaukee?
The IJ describes what’s at issue:
Should the city of Milwaukee be allowed to outlaw competition in the taxi market, causing permits to rise in price from $85 to a staggering $150,000?
That is the question to be answered by a major lawsuit filed today by the Institute for Justice (IJ) – national public interest law firm – and three Milwaukee taxi drivers: Ghaleb Ibrahim, Jatinder Cheema and Amitpal Singh….
‘In the classic story of entrepreneurship, someone starts a taxi business in order to save up enough money to buy a house,’ said IJ Staff Attorney Anthony Sanders, lead counsel in today’s lawsuit. ‘In Milwaukee, you need to save up enough money to buy a house just to start a taxi business.’
In 1991, the city of Milwaukee prohibited any new entrepreneurs from entering the taxi market. The city council imposed a hard cap of 321 taxis for the entire city, and made it so that the only way to get a taxi permit was to purchase one from an existing permit holder.
As a result, today the city has just one taxi for every 1,850 residents (compared to 1 in 90 for Washington DC and 1 in 480 for Denver) and taxi permits have risen in price from $85 to $150,000 – more than the average cost of a house in Milwaukee.
An Institute for Justice study, entitled Unhappy Days for Milwaukee Entrepreneurs, reveals that the Milwaukee’s taxi law is effectively a scheme to benefit a small group of entrenched businesses at the expense of entrepreneurs, who lose out on opportunities, and at the expense of consumers, who face poor service and long wait times.
How bad is it? This bad:
One taxi owner, Milwaukee County Supervisor Joe Sanfelippo, owns almost half the city’s taxi permits. His brother Mike runs one of the city’s biggest taxicab companies, American United.
Should you be surprised, really?
For more about the lawsuit, see www.ij.org/MKETaxis.