Transportation Network Providers – 5th Amendment

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7^th Circuit court of Appeals

Case Name: Joe Sanfelippo Cabs, Inc., et al v. City of Milwaukee et al

Case No.: 16-1008

Officials: POSNER, WILLIAMS, and SYKES, Circuit Judges

Focus: Transportation Network Providers – 5^th Amendment

Appellant claims that services such as UBER and LYFT and their attainment of permits to operate taxi-like services violate the WI constitution are invalid.

“The plaintiffs’ contention that the increased number of permits has taken property away from the plaintiffs without compensation, in violation of the constitutional protection of property, borders on the absurd. Property can take a variety of forms, some of them intangible, such as patents. But a taxi permit confers only a right to operate a taxicab (a right which, in Milwaukee, may be sold). It does not create a right to be an oligopolist, and thus confers no right to exclude others from operating taxis. An excellent amicus curiae brief filed by Reason Foundation offers the hypothetical example of a city government that “issued a license to the first grocery store or gas station in a growing town. Years later, after the population had grown, other individuals applied for li‐ censes to create competing grocery stores and gas stations to better serve the needs of the expanding market. … Ultimately, the pressure for additional services might drive the City to issue additional licenses,” thus breaking the monopoly of the initial, single licensee. “It would be absurd for the incumbent owners of the sole grocery store and gas station to assert a property right in the monopoly value of their businesses and claim a ‘taking’ for any reduction in secondary market value due to the newly‐issued licenses, just as it would be absurd to claim a taking for reduced profits resulting from increased competition.” (The term “primary market” in the preceding sentence refers to the issuance of the licenses, “secondary market” to the resulting competition among the licensees, which is to say the taxi companies, including however the app‐based ridesharing companies.)

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.