Little Rock Taxis

The City of Little Rock had only one taxi business, and it was illegal to start a second one. Little Rock’s government had completely forgotten that the right to choose which taxi to hire belongs to customers, and the government does not get to make this choice for them. Yet that is exactly what Little Rock’s government was doing by intentionally providing a monopoly to the only taxi company in town.

Rather than doing what was best for the public, Little Rock’s government had become one company’s henchman. Little Rock’s unusual ban on new taxi companies prevented Little Rock’s citizens from enjoying the competition, job creation, and consumer choice found in most other U.S. cities.

An entrepreneur and his environmentally friendly hybrid taxi business finally had enough. They have filed suit in Pulaski County Circuit Court arguing that the city’s establishment of a private monopoly violates the Arkansas Constitution. Monopolies are harmful to entrepreneurs, employees, and consumers alike, which is why the Arkansas Constitution forbids them.

The Little Rock Board of Directors had directly violated multiple sections of the Arkansas Constitution. Unfortunately, it appeared that only a lawsuit would make the Board notice. That is why a taxi driver and his fledgling business joined forces with the Institute for Justice to vindicate the right of entrepreneurs to compete.

On December 7, 2016, Circuit Judge David Laser granted our motion for judgment on pleadings and held that Little Rock had violated the Arkansas Constitution’s antimonopoly clause. This resulted in a final judgment in entered in Ken’s favor on January 25, 2017, which the city chose not to appeal.

But all was not done. With the unconstitutional barriers removed, Ken was still required to reapply for taxi permits, which he did. On May 16, 2017, the Little Rock Board of Directors begrudgingly agreed that Ken had met all of the other requirements, which also meant that the Board was required to issue the taxi permits to him.

Ken celebrated by purchasing more taxi vehicles and hiring more drivers. Thanks to his willingness to fight for his dream and a little help from the Arkansas Constitution, Ken not only made Arkansas a little freer, but he also won the right to do what he does best— create more jobs in Little Rock.

Learn more about this Institute for Justice case by clicking here.

Photo: Institute for Justice