Lawprof: "Does Legalizing Uber and Lyft 'Take' The Property Of Taxi Companies?"

by Robert Thomas, InverseCondemnation, May 22, 2019

Short answer: no.

But the longer answer which lawprof Ilya Somin discusses in this short podcast is worth listening to. Check it out. 

Here's the summary:

Over the last few years, taxi companies in several cities have brought lawsuits claiming that legalizing ride-share services such as Uber and Lyft violates the Takings Clause of the Fifth Amendment, because it expropriates their supposed property right to a monopoly of the taxi business. Courts have so far rejected these arguments. But they raise broader issues about the nature of property rights, and what kinds of government actions qualify as a taking. Confusion about these matters goes well beyond this specific set of cases. Could treating government-created monopoly privileges as property rights imperil valuable innovations and reforms in many parts of the economy?

We follow the issue, mostly from an academic standpoint (we've yet to take on one of these cases, but find the issues fascinating). We penned an essay on the takings issues in the U. Hawaii Law Review suggesting that the courts' focus on the foundational "property" question should not be the analytical center of these cases. Rather, they should examine the expectations which the owners of taxi medallions possess, instead of isolating a particular "stick" (does an owner have a property rights in a lack of competition," a question which suggests its own negative answer).

This situation may be a case of "nothing new under the sun," because it reminds us of that old war horse of a case, Charles River Bridge v. Warren Bridge, 36 U.S. (11 Pet.) 420 (1837), where the Supreme Court held that a state-granted charter to build and operate a toll bridge did not prohibit the state from allowing another nearby bridge that made the first bridge's charter rights less valuable. 

PDF: "Property" Investment-Backed Expectations in Ridesharing Regulatory Takings Cases