The Institute for Justice is defending two Portland limo companies that gave customers Groupon.com discounts. Who knew that lowering prices would be illegal and the criminals who practice price lowering are subject to $895,000 fines?
When did giving your customers a good deal become illegal? The answer is in 2009, when Portland rewrote the for-hire transportation rules with the explicit purpose of shielding taxicab companies from price competition.
Now limo and sedan operators must charge at least 35 percent more than the prevailing taxicab fare, and at least $50 for trips to the airport. Additionally, car services (as limos and sedans are collectively called) must wait a minimum of 60 minutes between the time a customer calls and the time they are picked up….
Portland’s largest taxicab company actually asked the city to stop other businesses from “poach[ing] taxi fares out of downtown.” Surprisingly, the city’s Revenue Bureau agreed that affordable limo and sedan services were a “problem” simply because they threaten the profits of taxicab companies, and its director encouraged the city council to “make it more difficult for them to take the taxi rides, the lucrative rides from the hotels to the airport.”
But the government has no business picking winners and losers in the transportation industry, especially when the losers are consumers and the winners are established taxicab businesses that only want to charge their customers more. What taxi companies call “poaching,” others call honest competition.