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Milwaukee frees number of taxi cabs permitted in city

Last year Judge Jane Carroll of the Milwaukee County Circuit Court declared unconstitutional the city of Milwaukee’s law imposing a cap on the number of taxicabs in the city. This morning, July 22, 2014 the city finally complied with that order when the Common Council voted unanimously to completely lift the cap on how many taxicabs may operate in the city. In lifting its cap, Milwaukee becomes one of the freest cities in the nation for drivers looking to enter the taxicab market.

The new law requires taxis to comply with basic health and safety requirements such as inspections and minimum insurance coverage. Long-time cab drivers like Ghaleb Ibrahim and Jatinder Cheema have been waiting for this day for years. In 2011, Ibrahim and Cheema joined a coalition of other cab drivers and the Institute for Justice, a public-interest law firm, in filing the lawsuit that resulted in today’s Common Council vote.

“This is the culmination of a long struggle against an oppressive and unconstitutional system” said Institute for Justice Attorney Anthony Sanders. “It used to be that because of the government-imposed cap, a Milwaukee taxicab cost more than a house. Taxi entrepreneurs can now afford to keep their house and open a business, too.”

The law also offers a path for services such as Uber and Lyft to be recognized and licensed, increasing transportation options in Milwaukee. The former cap, implemented by the city in 1991, caused the price of a taxi permit to rise from $85 to over $150,000 on the secondary market. Under the law, the number of cab permits was fixed at about 320. However, in response to the cabbies’ court victory, the city voted last November to lift the cap on the number of cabs by 100. Then, this morning, the city moved to lift the cap altogether.

“The unconstitutional cap is no more,” said Cheema. “Now, after driving in the city for more than a decade, I finally have the right to open my own cab company without having to buy permission from someone else.”

Despite today’s victory for aspiring cab operators, the struggle for taxi freedom in Milwaukee is not over. The existing taxi owners, who have enjoyed the protectionism offered by the city’s cap for over 20 years, are not going away without a fight. They have vowed to sue to prevent the cap from being repealed. The Institute for Justice and its clients stand ready to intervene in any lawsuit that seeks to prevent the city from lifting the cap and to have the lawsuit dismissed.

The Institute for Justice has helped open taxi markets in Denver, Indianapolis, Cincinnati and Minneapolis, and for more than 20 years has been the nation’s leading legal advocate for the rights of entrepreneurs.