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Medallion Cabs Sue to Exclude

Medallion Cabs Sue to Exclude

2 Mins
February 21, 2014

Some people hate freedom so much, they’ll sue to get rid of it. Other people’s freedom, at least. Such is the case in Chicago, where owners of taxi medallions are suing to force the city to crack down on Travis Kalanick’s Uber and other innovative transportation businesses.

Plaintiffs’ lawyer Michael Shakman calls Uber “an exclusionary, elitist taxi system operated side-by-side with the lawful, highly regulated taxi system that our clients and their customers have engaged in, with the city’s consent and requirement, for many years.”

It’s elitist and exclusionary, you see, because Uber cars are summoned by a smartphone app and paid by credit card, so you have to have a smartphone and a credit card to use them. And only a select elite can get smartphones and credit cards.

Oh, wait. That’s not quite true, is it?

No, actually, what’s elitist and exclusionary here is the “highly regulated taxi system.” One of the regulations is that you need a medallion, and medallions are issued in limited numbers that make them, shall we say, a lot more expensive than smartphones . And unlike smartphones, which cost money because they are values produced by intelligence and hard work, medallions are expensive because if you operate a taxi without one, the government threatens to use force to stop you. Medallions get their whole value from the exclusion of those who don’t have them from the taxi market—smartphones are if anything more valuable the more people have them.

Of course, even if Uber’s services were available only to a few selected people or to the wealthy, there wouldn’t be anything about that to warrant a crackdown, any more than there’s an injustice in limo services costing more than most people can routinely spend. There’s no principle of equality that forbids offering services that some people can’t afford—or that some people can’t afford the conditions of using. And it really is the case that some people can't afford smartphones—or Uber fares, or for that matter taxi fares. That inequality of wealth doesn't make either Uber or taxis unjust.

But there is a principle of equality before the law. Medallion cab systems deny some people the freedom to operate cabs in order to help other drivers find customers. That’s the inequality that’s unjust in Chicago taxi law.


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Regulation and Taxation