Wednesday, March 2, 2016

Taxi driver sues the city over cab monopoly

Posted By on Wed, Mar 2, 2016 at 4:39 PM

click to enlarge Leininger with one of his cabs.
  • Leininger with one of his cabs.
Ken Leininger, owner of Ken's Cabs, filed suit against the city today, claiming its contract with Yellow Cab violates the Arkansas Constitution's prohibition against monopolies.

Leininger, who City Attorney Tom Carpenter believes has been operating anyway, applied for a permit last year but was turned down because he was unable to show the company would serve as a “public convenience and necessity,” as required by ordinance. He appealed to the city Board of Directors; they did not overturn the denial but recommended he apply again this year, Carpenter said. To Carpenter's knowledge, he has not reapplied. Carpenter said he had not seen the suit.

The city does restrict new tax permits, Carpenter said. Leininger would have had to show that Yellow Cab (Greater Little Rock Taxi Service LLC) was not adequately serving the whole city. 

The suit was filed in Pulaski Circuit Court. Leininger's lawyer is Chris Burks, who is working with the Institute for Justice in Virginia.
A full press release is on the jump.

Lawsuit Seeks to End Little Rock’s Taxi Monopoly

Institute for Justice Joins with Entrepreneur to Stop Government-Imposed Taxi Monopoly
Little Rock, Ark.—The Arkansas Constitution says that monopolies are “contrary to the genius of a republic, and shall not be allowed,” but that has not stopped the City of Little Rock from enforcing an ordinance that grants a monopoly to the only taxi company in town. Today, the Institute for Justice has joined a local taxi-driver-turned-entrepreneur in filing a lawsuit that seeks to end the city’s taxi monopoly once and for all.

The City of Little Rock currently prohibits any new cab companies from competing with its one existing company, Greater Little Rock Taxi Service, LLC (“Yellow Cab”), by allowing new taxi permits to be issued only if “public convenience and necessity” leave no other choice and if doing so will not harm the existing permit holder. In other words, a newcomer to the Little Rock taxi market needs to obtain arbitrary approval from the city government and permission from their competitor.

After eight years of working as a driver for Yellow Cab, Ken Leininger decided to start his own business. He founded Ken’s Cab, a taxi company that only uses hybrid vehicles and offers reliable service at competitive fares. Ken believed he could deliver a better service to the people of Little Rock, provide a better deal for drivers, and successfully compete with Yellow Cab. But when Ken tried to get permits for his new business early last year, his applications were repeatedly denied.

Little Rock’s Fleet Services Department admitted that Ken met all of the requirements other than “public convenience and necessity” and approval from Yellow Cab, and therefore denied Ken’s application. Shocked, Ken appealed the decision to Little Rock’s Board of Directors. When the Board heard Ken’s appeal at its meeting in October, Fleet Services again admitted that Ken met all of the other requirements. Some Directors even admitted that Little Rock had created a private monopoly. But when Yellow Cab’s owner asked the Board to reject Ken’s appeal, it did, preserving the monopoly for Yellow Cab.

“Little Rock has only one taxi company, and it is illegal to start a second one,” said Institute for Justice Attorney Justin Pearson, who represents the plaintiffs in the lawsuit. “The government should not be Yellow Cab’s henchman, doing what’s best for Yellow Cab rather than what’s best for the citizens of Little Rock.”

Ken was not going to give up his right to earn a living, especially when he felt that consumers—not the government—should decide whether a new taxi business is “necessary.” So, he teamed up with the Institute for Justice to end the Little Rock taxi monopoly.

“It doesn’t seem right that the government can tell me that I can’t have a taxi service when I know I’ve fulfilled all of the requirements and more,” explained Ken Leininger.

“As Ken’s story shows, monopolies are harmful to small businesses and to customers, which is why the Arkansas Constitution prohibits them,” said IJ Attorney Allison Daniel, who also represents Ken. “Unfortunately, it will take a lawsuit to make Little Rock’s Board of Directors acknowledge that.”

Tags: , ,


Comments (7)

Showing 1-7 of 7

Add a comment

Subscribe to this thread:
Showing 1-7 of 7

Add a comment

More by Leslie Newell Peacock

  • Say, it's sweet potato pie contest time again!

    An ingredient that shaped Little Rock's culture for years was Robert "Say" McIntosh's famous sweet potato pies. The Mosaic Templars Cultural Center pays homage to Say and his pies with its annual "Say It Ain't Say's" sweet potato pie baking contest, now in its fifth year.
    • Oct 27, 2016
  • Leg room soon at The Root Cafe

    People who love dining at The Root Cafe but shy away because of the crowds will be happy to learn that the new dining area likely will be open by the end of next week. Corri Bristow Sundell, who owns and operates the Root Cafe with her husband, Jack Sundell, said the restaurant is waiting on the city plumbing inspector for the second bathroom the restaurant was required to install when it added three shipping container units.
    • Oct 26, 2016
  • Cheese dip champs, highest hog roasters: Here are the winners

    The city's sages in the secrets of great cheese dip and whole hog roasting showed off last weekend, at the 6th annual World Cheese Dip Championship, held last Saturday, Oct. 22, at the River Market pavilions, and the 4th annual Arkansas Times Whole Hog Roast on Sunday, Oct. 23.
    • Oct 26, 2016
  • More »

Readers also liked…

  • War. What is it good for? Tom Cotton has an idea

    Twenty-four hours after meddling in President Obama's talks with Iran, hawkish Sen. Tom Cotton scheduled an off-the-record meeting with defense contractors, who'd be happy to supply goods for U.S. armed incursions in the Middle East.
    • Mar 9, 2015
  • Saturday's open line

    Got any thoughts? Put them here.
    • May 21, 2016
  • Remains found on Petit Jean are those of John Glasgow

    The human remains found Wednesday on Petit Jean Mountain are those of John Glasgow, the Little Rock construction executive missing since 2008.The family has scheduled a 4 p.m. news conference.
    • Mar 12, 2015

Most Shared

  • Issue 3: blank check

    Who could object to a constitutional amendment "concerning job creation, job expansion and economic development," which is the condensed title for Issue 3 for Arkansas voters on Nov. 8?
  • Little Rock police kill man downtown

    Little Rock police responding to a disturbance call near Eighth and Sherman Streets about 12:40 a.m. killed a man with a long gun, Police Chief Kenton Buckner said in an early morning meeting with reporters.
  • From the mind of Sol LeWitt: Crystal Bridges 'Loopy Doopy': A correction

    Crystal Bridges Museum of American Art is installing Sol Lewitt's 70-foot eye-crosser "Wall Drawing 880: Loopy Doopy," waves of complementary orange and green, on the outside of the Twentieth Century Gallery bridge. You can glimpse painters working on it from Eleven, the museum's restaurant, museum spokeswoman Beth Bobbitt said
  • Ted Suhl loses another bid for new trial; faces stiff sentencing recommendation

    Ted Suhl, the former operator of residential and out-patient mental health services, has lost a second bid to get a new trial on his conviction for paying bribes to influence state Human Services Department policies. Set for sentencing Thursday, Suhl faces a government request for a sentence up to almost 20 years. He argues for no more than 33 months.
  • Football and foster kids

    It took a football stadium to lay bare Republican budget hypocrisy in Arkansas.

Most Viewed

Most Recent Comments



© 2016 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation