In covering a groundbreaking court decision on Uber and taxi regulations in Chicago, The Boston Globe omitted a key part of that ruling (“Chicago Uber ruling a blow to Hub taxis,” Business, Oct. 12).
As in Boston, the value of taxi medallions has plunged in Chicago, thanks to greater competition from ride-hailing services such as Uber and Lyft. Claiming the drop in value was a “taking” that violated their constitutional rights, Chicago taxi medallion owners sued the city, demanding “just compensation.” If this is granted, taxpayers could potentially be on the hook to pay out hundreds of millions of dollars.
Thankfully, the US Court of Appeals for the Seventh Circuit unanimously ruled that “there is no merit” to that claim, affirming the principle that reform should not be contingent on bailing out incumbents. Likewise, the court rejected a similar takings claim made by Milwaukee medallion owners who sued after the city eliminated its cap on cabs. Their claim for compensation “borders on the absurd,” the judge wrote.
Federal courts have reached similar conclusions regarding taxi medallions in Minneapolis and Boston. Together, these decisions set an important precedent for liberalization, especially if Boston decides to scrap taxi medallions.
The author is a writer at the Institute for Justice, which intervened on behalf of ride-hailing drivers in Chicago.