With the advent of ride-sharing services like Uber and Lyft, taxicab companies are facing stiff competition. In Miami-Dade County, taxicab owners sued the county after it legalized these ride-sharing services, contending that this competition devalued their business. A federal judge recently rejected these claims, saying that the government has no duty to protect taxicabs from competition.
Prior to the arrival of Uber and Lyft, owning a taxicab medallion in Miami-Dade County was a lucrative investment. The county handed out a limited number of these medallions, limiting taxicab numbers. The government cap on cabs limited competition, ensuring a high price for medallions. With the county’s legalization of ride-sharing services, however, the price of a taxicab medallion in Miami-Dade County has fallen by 90%.
In response, Checker Cab, B&S Taxi, and Miadeco sued the county. They argued that they had a property interest in the value of a taxicab medallion. Legalizing competing services, they claimed, was an illegal government “taking” of their property.
In early August, the 11th U.S. Circuit Court of Appeals unanimously rejected that argument. These judges held that these companies are not entitled to a competition-free marketplace. The court ruled that these taxicab companies could not force the government to protect them from competition. The taxicab medallions are licenses to operate taxi services, not licenses to have no competitors.
There have been other suits of this type brought by taxicab companies. A similar suit in Chicago led to the same holding, with a federal circuit court finding that taxicab companies had no legal right to be free from competition.
Do you think that Uber, Lyft, and other ride-sharing services are unfair competition for taxi companies? Should courts protect taxicab owners from competition?