Pileup At The Taxi Stand

Can cabbies make rivals unconstitutional?

The Minneapolis Taxi Owners Coalition has come up with a novel response to increased competition: They're suing, claiming that the very existence of their new rivals is unconstitutional.

Recent reforms to taxi regulations in Minneapolis would allow more cabs in the city for the first time since the 1940s and lift the cap on licenses entirely by 2010. That may be good news if you're looking to start a taxi company, but it's not so great if you were counting on reselling your taxi license for up to $25,000, as Minneapolis hacks often do.

Now the taxi coalition is alleging that the state, by devaluing their licenses, is unconstitutionally taking private property without any compensation. "They had investment expectations of their licenses," says Lawrence Crosby of St. Paul (Minn.)-based Crosby & Associates, the attorney representing the coalition. "To broaden the market so significantly is a huge blow to them."

That may be, but Guy-Uriel Charles, dean of the University of Minnesota Law School, says the lawsuit doesn't have merit and might even be frivolous. "This is seriously pushing the bounds of constitutional law," he says. The taxi drivers' argument, he says, "is essentially that they are entitled to an anticompetitive market." Maybe it's time to try the bus.

By Amy S. Choi

Edited by Jeremy Quittner

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