Republican Bill Deregulates Taxis

Say goodbye to the traditional taxicab. Maybe.

A bill making its way through the Wisconsin State Legislature would eliminate Milwaukee’s regulatory framework for taxicabs and taxicab drivers. The sweeping deregulation would end all local control oversight over taxicabs, placing what oversight is left solely with the state’s Department of Safety and Professional Services. The move would drastically alter how taxis operate in Milwaukee, including eliminating the universal, regulated fare structure, citizen complaint process and police-led background checks.

The bill is being introduced by Sen. Steve Nass (R-Whitewater) and Rep. Dan Knodl (R-Germantown). In an email to his fellow legislators, Knodl says the bill “helps get the government off the backs of business and increases competition.” According to Knodl, the bill is intended to place taxicabs on the same competitive plane as transportation network companies (TNC) such as Uber and Lyft.

In 2015 the legislature passed a law eliminating the ability of municipalities to regulate TNC’s, a move that was criticized by officials in both Milwaukee and Madison. The legislation authorized the mobile application-based companies to operate statewide without having to follow any local licensing and fare regulations. Its adoption would seem to pave the way for passage of this new bill affecting taxicabs.

One of the big things Uber and Lyft were able to avoid with the 2015 legislation was the need for drivers to be licensed by local governments. The companies were allowed to perform background checks themselves. The proposed legislation would do the same for taxicab drivers.

The taxicab companies, which would have to secure a license from the state, would be required to perform the background check themselves. Drivers would not be allowed to drive for licensed companies in the event the driver has had more than three moving violations in the past three years or has in the last seven years committed an offense that resulted in a suspension, revocation, or other conviction counted under s. 343.307 or any crime involving fraud, theft, damage to property, violence, acts of terror or the use of a motor vehicle in the commission of a felony. Drivers would also be required to provide proof of insurance, be at least 18 years of age and not appear in a national sex offender registry.

Similar to the TNC legislation, the legislation provides no expiration or renewal process for the companies performing background checks on their drivers. Milwaukee taxi drivers are currently required to appear before city committees to address criminal or driving violations on an annual basis. The City Clerk‘s office is preparing a report on the number of cases heard by the council in recent years.

Alderman Robert Bauman isn’t pleased with the proposal. “Basically what they’re saying is citizens in Milwaukee will have zero protection or accountability,” he complained to Urban Milwaukee. Bauman chairs the Public Works Committee that routinely holds hearings on driver licensing.

Taxis would be required to post their fare structure inside the vehicle, but would not have to follow a set rate schedule.

The proposed legislation prohibits companies from charging more for passengers with disabilities, but does not include any requirement for wheelchair-accessible vehicles. The bill states: “Each licensed company shall adopt a policy of nondiscrimination on the basis of trip origin or destination, race, color, national origin, religious belief or affiliation, sex, disability, age, sexual orientation, or gender identity with respect to passengers and prospective passengers and notify all of its drivers of the nondiscrimination policy.”

Taxicab legislation had become increasingly controversial in recent years, even before companies like Lyft and Uber began providing rides in Wisconsin. The city lost a lawsuit regarding its nearly 25-year-old cap on the number of cabs. In March 2014 the city attempted to please license holders and license applicants by issuing 100 new licenses. By July, the city had eliminated the cap entirely and legalized new market entrants Uber and Lyft.

The moves sent the value of permits, which were trading for $150,000, to effectively zero. Further compounding the taxicab industry woes, the state intervened to deregulate companies like Uber and Lyft, but left traditional taxis at the status quo.

Knodl and Nass are currently circulating their taxi deregulation bill in an attempt to find additional sponsors.

One likely sponsor is Rep. Joe Sanfelippo (R-New Berlin), whose family owns the American United Transportation Group. The company, which now brands itself as TaxiMKE, is the largest holder of taxicab permits in Milwaukee.

Sanfelippo’s family sued the city after they lifted the cap on taxis, with a panel of judges from the federal Court of Appeals for the Seventh Circuit rejecting their claim.

Judge Richard Posner wrote: “The plaintiff’s 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.”

Sanfelippo had not returned a request for comment at the time of publication.

Milwaukee today has 412 licensed cabs and 1,951 licensed drivers, up from 320 cabs under the taxicab cap.

If you think stories like this are important, become a member of Urban Milwaukee and help support real independent journalism. Plus you get some cool added benefits, all detailed here.