United States Department of Transportation
i
The Application of the Federal Antitrust Laws to Municipal Taxicab Regulation
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1983-12-01
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By Seligman, J.
[PDF-2.96 MB]
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Abstract:This report analyzes the application of Federal antitrust laws to municipal regulation of the taxicab industry. Spurred by two recent Supreme Court decisions involving the electric utility and cable television industries, municipalities have become concerned that their regulatory practices vis-a-vis the taxi industry may be in violation of Federal antitrust laws. This report first describes the two-part Supreme Court test for municipalities to secure exemption from these laws and then analyzes municipal taxi regulation's compliance with this test. States are generally exempt from antitrust laws. Recent court cases suggest that municipalities are exempt only under specific circumstances. Municipalities come under the umbrella of state exemption if local regulation is authorized by state law "clearly articulating" and "affirmatively expressing as state policy" the regulation in question and if municipalities undertake "active supervision" of the regulated industry. The report states that in only nine states are municipalities fully under this umbrella, while they are partially sheltered in several more. The report concludes that with regard to their exposure to charges of antitrust violations in connection with taxi regulation, municipalities can make one of three choices. They may do nothing and await clarification from the courts, they may deregulate their taxi industries, or they may persuade their state legislatures to pass laws bringing them under the protection of state exemption.
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