Editorial: Bring free market to cabs

Monday, Sept. 25, 2006 | 7:17 a.m.

It's time to shut off the meter on a section of Nevada law that has for years been running potential new cab companies out of contention for certificates to operate.

Without a certificate from the Nevada Taxicab Authority, cab companies cannot legally put drivers to work, as noted last week in a story by Las Vegas Sun business reporter Richard Velotta. State law spells out the conditions under which the authority can grant the certificates.

One section of the law says the authority "shall issue the certificate if it finds that ... the granting of the certificate will not unreasonably and adversely affect other carriers operating in the territory for which the certificate is sought."

Additionally, the law states that the applicant for a certificate "has the burden" of proving to the authority that this condition will be met.

Because of the law, cab companies, particularly those with certificates to operate in Las Vegas' lucrative resort corridors, intervene with strong complaints about unreasonable and adverse impacts on their businesses whenever anyone applies to start a new cab company or expand an existing, permitted territory. They are usually successful in freezing out the competition.

This is akin to denying an applicant's business license to run a bakery because the owner of a bakery on the same block has filed a formal complaint saying that his doughnut sales will go down if a new bakery is allowed to open. And it would be up to the aspiring bakery owner to prove the complaint wrong.

We believe the Taxicab Authority is an important agency, but we do not believe any part of its function should be to stifle competition. We are perfectly fine with the authority examining an applicant's character and financial ability to start or expand a cab company. We believe the authority should have an inspection schedule for the vehicles in cab companies' fleets, as protection for the riding public.

We believe it should have inspectors to keep drivers honest. We believe it should act as an arbiter when disputes among cab companies arise or complaints are received from riders. The authority should have the power to revoke the certificates of drivers or companies if warranted by evidence that the public trust has been violated.

But never should the authority have to act obsequiously before existing cab companies that are motivated by a desire to destroy competition through an archaic law rather than through business acumen.

This anti-competitive law should be scrapped by the 2007 Legislature.