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| Davette Blalock |
On Tuesday, January 17th the Metro Council will consider on second reading ORDINANCE NO. BL2011-49 sponsored by Council Member Davette Blalock. This bill would remove the price fixing regulation of limousine service that is currently in the Metro Code.
Background:
In June 2010, the council enacted Ordinance
No. BL2010-685, a limousine price-fixing bill that protected the big limo companies from competition. That ordinance imposed a minimum $45 fee for limo services, it
prohibited the use of leased vehicles, and imposed age and mileage restrictions. All of these provision were designed to protect the luxury established limo companies from competition. Economy limo companies were providing limo service for a little as $25 and were cutting into the business of the established limo companies.
When learning that Metro had passed such a bill in June 2010, I was
appalled that not a single member of the Metro Council opposed it, even
the conservative members of the Council who I would assume claim to be
champions of limited government and free enterprise. To their credit a
couple members,
Councilman Eric Crafton and
Councilman Sean McGuire attempted
to repeal the price fixing bill but were unsuccessful. Several Council
Members told me that when the bill was presented to them, they really
did not know what it did and were led to believe that it had the support
of the industry. That is not a good excuse; they should have read the bill.
Now, the Council has the chance to do the right thing and correct a grave error.
What the Proposed Bill would do:
This proposed ordinance would remove the current
$45 minimum fee that livery vehicles are required to charge. It would amend the permit process so that
the applicant for the permit is not required to hold the title to the vehicle in order
to obtain a permit. In other words, it would allow for the use of leased vehicles and would allow the driver of a vehicle to own his vehicle and work for a company that has the permits. A third provision of this ordinance adjusts the minimum
mileage requirements and maximum age requirements for vehicles used as a passenger vehicle for hire. Effective January 1, 2012, under the current code, a vehicle could not begin
service if it is more than five years old and vehicles could not remain in
service if they are more than seven or ten years old, depending on the
category of the vehicle. This ordinance would remove the age limitation
and rely solely upon the mileage limitation currently in the code. Under
this limitation, vehicles cannot exceed 350,000 miles on their
odometer. Also, the ordinance adds a specific minimum time
requirement of fifteen minutes for pre-arrangement of services.
Metro is being sued over this issue.
Metro Government is currently being sued by the economy limo companies, being represented by the
Institute for Justice, a nationally acclaimed libertarian, civil liberties, public interest law
firm, You may know IJ from their fight against the city a few years ago when they representing
Joy Ford . MDHA was going to take her property near Music Row by eminent domain and sell it to a big company for what MDHA considered a better use. Joy Ford did not want to sell. Finally she won, but had it not been for IJ, the city would have taken her property by force.
Now, IJ is suing the city on behalf of the econo limo companies alleging that the various restrictions in BL2010-865 are
unconstitutionally arbitrary and are irrational regulations designed to
eliminate competition. The challenged regulations are the minimum fee,
the requirement that businesses must hold title to the vehicles, the
requirement that they dispatch solely from their place of business, and
the minimum age requirement, which the proposed bill would fix. If Metro does not pass the pending bill before it, I suspect the IJ will prevail in court. However, by the time it gets to court the econo limo providers will have had to stop providing limo service and most likely will have gone broke. Often justice delayed is justice denied.
Is this a perfect bill?
No, it is not. Other than a liability insurance requirements and some safety regulations and licensing, I would like to see all economic regulation of transportation removed including restrictions on entry into the market. I do not think Metro should be in the business of restricting competition in limos, buses, or taxis. However, a general deregulation is not going to occur immediately and the immediate issue of limousine price fixing should not be deferred because we can't get total economic deregulation. It would be foolish to make the perfect the enemy of the good.
There are three provisions of the existing limousine pricing fixing Metro code or proposals in the bill under consideration that do not adequately addressed the issue of over regulation.
- The 350,000 mile limit: Under
this proposed bill the limitation that vehicles cannot exceed 350,000 miles on their
odometer should be removed. This will not likely effect many, if any vehicles, so why even have it in the code. Anyway, by the time a vehicle has 350,000 miles on the odometer it may have a new transmission, a new engine, and all new components. A well maintained and repaired vehicle could be a mostly new by the time the odometer reaches 350,000 miles. Let the vehicle owner decide when it is time to replace the vehicle as long as the vehicle meets safety requirements. The following two restrictions are more serious are unnecessary and add inconvenience and cost to limousine operations.
- The 15 minute wait: Under this proposed bill, once a customer calls for a limo, at least fifteen minutes must lapse between the request for the limo and getting in the limo. Why? If someone is already late for the airport, maybe because a cab has stood them up or whatever, why make them wait another 15 minutes if the limo is already at the same hotel dropping off another guest?
- Only one customer per hour. There is a provision is the code that says a limo must be engaged for a minimum of one hour. What is the logic of that? If someone takes a limo from the airport to a downtown hotel, on a good day, that may only be a 20 minute ride. Why make the limo set idle for another 40 minutes?
While this bill is not perfect, it addresses the most odious provisions of the current limo price fixing code provision. I would hope that the three issue above could be addressed but even if they are not, what is proposed in a hundred times better than the current code. I hope no one will vote against the current bill because it is less than perfect but I hope they will try to amend it to improve it.
Please Contact your Council Member:
I know their has been a lot of maneuvering to influence the council on this issue. The established limo companies wanting to keep their market share have lobbied the council hard to maintain the status quo. The have hired former Councilman
Jami Hollin to lobby the Council. Some important metro figures have family connections to the luxury limo business. I hope the Council will do the moral think and vote against crony capitalism and vote for free markets.
Please call or write your councilman and all of the council members at Large and urge them to support BL2011-49. To get contact information for your councilman, follow this
link.
I have covered this issue extensively on this blog. To see video, other articles, and learn more, follow this
link.
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