What We Saw at MIlwaukee's Taxi Lottery (March 17, 2014)

http://iam.ij.org/1l6Y1GG
For the first time in over 20 years, Milwaukee will be issuing new licenses for taxicab drivers. This victory for economic liberty is a direct response to a hard-fought case won by the Institute for Justice. Back in 1991, Milwaukee capped the number of cab permits and banned issuing new ones. So if a driver forgot to renew his license, that license would disappear.

100 new licenses were awarded at a lottery at Centennial Hall, 733 N. 8th St. at 11 a.m. CST on Monday, March 17. Each person could have up to two tickets, though each application has a $100 non-refundable fee. For a chance to obtain one of the 100 new permits, the city has received more than 1,800 applications so far. New cabs are expected to hit the streets later this spring.

By the mid-2000s, there were only 321 taxis on the streets of Milwaukee, or one cab for every 1,850 residents. That is one of the lowest ratios in the nation, well below Seattle (one per 940 residents), Denver (one per 480 people), Chicago (one for every 424 residents) and Washington, D.C. (one per 90 people).

This restriction created artificial scarcity in the transportation market. When IJ filed its lawsuit against the city in 2011, taxi medallions went for $150,000; the average sales price of a Milwaukee home was $100,000. According to a study commissioned by IJ, just two taxi companies owned more than half of all licenses in Milwaukee.
Last April, a circuit court judge struck down Brew City's taxi law as unconstitutional. In response, the Milwaukee Common Council voted to add up to an additional 100 taxi licenses, with a lottery determining just who gets these licenses.

While allowing more entrepreneurs to legally work is certainly progress, as IJ's lead plaintiff Ghaleb Ibrahim put it, "There should be no lottery on the American Dream." At 420 cabs for the city, Milwaukee will still only have one taxi for every 1,420 residents. Scrapping the cap entirely is necessary to foster small business and enhance consumer choice.
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