Taxi Companies Claim County Rules Favor Uber Over Cabs

Taxis wait in a holding area at Miami International Airport. (Lynne Sladk/Associated Press)

MIAMI, Fla. (CN) – Taxi companies are striving in Miami to accomplish what their peers failed to accomplish in a sister court: convince a federal appellate panel that local governments’ disparate treatment of cabs and ride-sharing services like Uber is unconstitutional.

Oral arguments commenced Tuesday at the Miami branch of the Eleventh Circuit Court of Appeals, in Checker Cab Operators and its co-plaintiffs’ lawsuit against Miami-Dade County.

The plaintiff cab companies claim Miami-Dade County violated their equal protection rights and engaged in an unlawful government “taking” of their business interests, by allowing  smartphone ride services like Uber to enjoy regulations more lenient than those applied to cab companies.  The regulations were set up in a 2016 ordinance, which established the legal framework for Uber and other smartphone ride services’ operation in the Miami market.

The proliferation of Uber and Lyft in Miami and across the country has threatened taxi drivers’ market share by all accounts, as passengers turn to their ride-hailing apps in place of cab dispatchers.

“In essence, [Miami-Dade County] has given [Uber and Lyft] carte blanche to operate in whatever fashion they deem fit … whereas the plaintiffs and members of the putative class are subjected to onerous, expensive and time-and-energy-consuming regulations,” the class action complaint alleges.

Among other grievances, the plaintiff cab companies say taxis are required to have licenses known as  “medallions” (historically valued at several hundred thousand dollars each), while Uber and Lyft drivers are not. The value of the medallions has been greatly diminished by the county’s decision to let Uber and Lyft drivers operate without one, the lawsuit alleges.

Oral arguments held Tuesday morning highlighted some of the legal obstacles faced by Checker Cab Operators and its co-plaintiffs.

Presiding U.S. Circuit Judge Stanley Marcus opened the proceedings by challenging the plaintiffs’ counsel to find case precedent “that would support the proposition that increased competition in a market is a [government] ‘taking.'”

Judge Marcus acknowledged that cab companies’ possessed a protected, intangible property interest via the cab medallions.

“The question is: how far does it extend?” the judge asked.

The judge’s line of questioning echoed some of the points raised in a 2016  sister court decision in the Seventh Circuit. In that similar case, taxi companies challenged the City of Chicago’s allegedly lenient regulations for Uber.

The plaintiffs in that case unsuccessfully attempted to equate the dilution of the taxi market with an unlawful taking of their property rights as taxi-license holders, as the Seventh Circuit panel saw it.

“‘Property’ does not include a right to be free from competition. A license to operate a coffee shop doesn’t authorize the licensee to enjoin a tea shop from opening,” the Seventh Circuit ruling reads. “When property consists of a license to operate in a market in a particular way, it does not carry with it a right to be free from competition in that market.”

Checker Cab Operators and its co-plaintiffs in the current litigation have claimed their case is distinguishable from the Seventh Circuit case,  in that Miami-Dade taxi companies (prior to the 2016 ordinance) had exclusive rights to act as for-hire drivers through electronic dispatch.

On Tueday, the county’s attorney Annery Pulgar Alfonso disputed that narrative. She argued that the county did not mean for the medallions to grant cab companies the ability to exclude others from entering the pay-per-ride market.

“The county has never promised a return on [taxi companies’] investment,” Pulgar Alfonso added.

The cab companies’ attorney Ralph Anderson countered Tuesday that the county created an expectation of a protected and exclusive intangible interest because it “nurtured and encouraged” the taxi medallion system.

He said the county caved into the “inertia of the digital age” without considering imminent damage to taxi companies in light of the unfair discrepancies between county regulations for taxis and for Uber.

The arguments Tuesday focused largely on the claims for unlawful taking. The claims  for violations of equal protection rights under the Fourteenth Amendment were left off the table.

Judge Charles Wilson  and Marcia Morales Howard, sitting by designation from the Middle District, accompanied Judge Marcus on the appellate panel.

The case is on appeal from the Southern District of Florida, where a federal judge granted the county’s motion to dismiss last year.

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