MILWAUKEE (CN) – While a federal judge decides whether to issue a temporary injunction, Milwaukee can continue to issue taxi permits to anyone who qualifies, including ride-sharing services Uber and Lyft.
Assistant City Attorney Adam Stephens said in court Wednesday that any licensed taxi can operate as a traditional taxicab or as a network vehicle, such as a driver for Lyft or Uber. Drivers can use a meter and charge the city-set rates or agree on any rate before taking the fare, provided it is electronically documented.
“The ordinance speaks for itself,” Stephens said after Wednesday’s hearing.
U.S. District Judge Lynn Adelman said he will decide in the next few days whether to reinstate a cap on the number of taxi permits the city issues.
Five taxi permit-holders sued the city last week, one of many lawsuits all over the nation that claim Uber competes unfairly by not having to comply with regulations that apply to traditional taxi companies.
In its brief opposing the temporary injunction, the city claimed the plaintiffs did not meet the minimum requirements for such an injunction to be granted.
“Plaintiffs in this case are not able to prove that the City of Milwaukee acted arbitrarily in lifting the previous taxicab permit cap,” the brief states. “Nor are they able to prove that they possessed a protectable property interest in the amount of taxicab permits the City determined to issue.”
The plaintiff’s attorney said in court Wednesday that the city disregarded legislation in lifting the cap on taxi permits effective Sept. 1.
Attorney Dean Laing said that the city had assured permit holders for years that no additional permits would be issued, thus protecting the value of the existing permits.
As a result, Laing said, one taxi driver declined to sell his permit for $150,000 to pay for his retirement.
Another driver, Laing said, got his permit in a divorce action – his wife got their house.
But the city claimed the permits’ value was assigned in the secondary market. The City of Milwaukee never sold permits directly, Stephens said in court, so property rights were never guaranteed.
“In order for a law to create a protected property interest,” the city’s brief states, “the law must give a person a legitimate claim of entitlement to a benefit, rather than a mere expectation of receiving it.”
But Laing said that in writing the ordinance, the city “kowtowed” to network-based companies like Lyft and Uber.
“They said, ‘Just tell us what you’re doing, and we’ll make a special exception for you,'” Laing said.
The city’s message to existing permit holders, according to Laing: “Too bad, how sad.”
Network-based services have entered the public passenger vehicle market since the city’s cap was created in 1992. The new technology sparked the city’s move to lift the cap on public passenger vehicle permits, according to the city’s brief, rather than merely issuing the 100 more permits allowed by an ordinance earlier in the year.
“The ordinance’s regulatory provisions and goals suddenly became inadequate,” the brief states.
Stephens said in court that the issue of app-based versus traditional taxi cab services is a distraction from the true issue: the diminished value of taxicab permits.
“I feel those other issues in this case are red herrings,” Stephens said in court.
The plaintiffs are represented by Dean Laing with O’Neil Cannon Hollman DeJong & Laing SC and Steven Biskupic with Biskupic & Jacobs.
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