Cab owners sue Milwaukee over permit cap lift

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Five taxi companies are suing the city of Milwaukee to invalidate an ordinance that would lift the cap on the number of cab operating permits allowed.

The suit was filed Monday in front of Eastern District of Wisconsin Judge Lynn Adelman by five cab companies, including Joe Sanfelippo Cabs Inc. All five are registered to Michael Sanfelippo, brother of Republican state representative Joe Sanfelippo.

The ordinance was passed in July and is scheduled to go into effect Sept. 1. The suit alleges the ordinance “impermissibly harms the taxicab property interests previously created by the City by eliminating entirely any cap on the number of taxicab permits and prohibiting the transfer of taxicab permits.”

According to the suit, the city has violated the companies’ due process and 14th Amendment rights.

The ordinance was passed in the wake of cab companies such as Uber and Lyft entering the market. The companies allow users, via a smartphone app, to hail a taxi and accept a ride at a predetermined rate.

But, according to the suit, the new ordinance does not say whether these companies are subject to city laws that regulate taxicabs – which has safeguards in place to ensure that cab drivers are honest with customers — or network vehicles — which do not.

The plaintiffs are asking Adelman to invalidate the ordinance and award the five companies damages and attorney’s fees.

The Milwaukee Common Council passed the law after litigation in state court forced the city to lift its cap. The Arlington, Va.-based Institute for Justice — which represented the plaintiffs in the state case — said it will intervene in this case to keep the ordinance in place. Follow @eheisigWLJ