LAKELAND – Hillsborough County’s minimum fair rule is meant to separate and protect two very different modes of for-hire transportation, according to Kyle Cockream, the executive director of the county’s Public Transportation Commission (PTC).
The rule recently was challenged in court by a local limousine-service operator who said that setting a minimum fair for limo drivers was unfair and anti-competitive.
The 2nd District Court of Appeal disagreed, affirming a lower-court ruling allowing PTC to enforce the rule.
“In the for-hire transportation industry, there is a term that is used called ‘cannibalism,’” Cockream told the Florida Record. “That’s what this rule is meant to prevent.”
He said cannibalism refers to the practice of lowering limo fairs to compete with taxi drivers during times when the limo driver doesn’t have other business.
He said it’s unfair because the two modes of for-hire transportation are operated and regulated differently.
Cab drivers, for instance, operate in an “on-demand, street-hail” structure where they are given prescribed driving hours to serve customers needing an immediate ride someplace.
Limo drivers, operate in a “prearranged” structure where rides are set up in advance for prescribed door-to-door service.
“So the primary purpose and delivery of the service is how they are determined and regulated,” he said.
Cockream said the county does not regulate a minimum fare for cab drivers, because the service isn’t prearranged, though it does regulate a maximum fare. For limos it’s the opposite – with the minimum set, but no ceiling on the maximum that can be charged.
“This is not something that’s unique here,” he said. “It’s a pretty standard practice in big cities around the country.”
He said the rule was adapted to ensure that a taxicab is available for anybody who needs one. If limo drivers “cannibalize” cab drivers’ fares when work is slow, that forces cab drivers out of business and deprives the city of an essential service.
Black Pearl Limousine, which originally filed the suit in 2013, argued in court that the minimum fair rule was anti-competitive because it kept customers from making their own choices and negotiating their own fares.
Since the ruling, the minimum fair has been reduced from $50 to $30.
Cockream said the reduction was made in response to the complaints from the limo industry, but that there are no plans to revisit or repeal the rule – especially after winning the initial court case and subsequent appeal.
Black Pearl’s attorney said the move was welcome, but alluded to an effort to repeal the county’s rule in an interview with the Tampa Bay Times newspaper. The company was represented by the Florida Branch of the Institute for Justice, a law firm that has filed similar suits across the country over government rules.
“It should not be against the law to give customers a good deal,” Justin Pearson, the institute’s attorney, said to the newspaper in a statement after the decision. “It is unfortunate the court chose to disregard the Florida Constitution, but we take solace in the fact that the minimum fare rule has been reduced and appears destined for full repeal.”