Nashville Limo Regulation

Paul H. Rubin —  20 April 2011

Just got an email from Mark Meranta (who I do not know) from the Institute of Justice (which I do know and which does great work) on a new case they are filing in Nashville regarding anti-competitive regulation of the limousine industry (video here. )  The law apparently mandates a minimum price for limo service to the airport – from about $25 now to a minimum of  $45 — and imposes other regulations. The law was passed to benefit the Tennessee Livery Association, a trade association which wants to limit competition.  The IJ is challenging the law in Federal Court.

There is a long history of municipalities messing around with urban transport (and here.)  The law being challenged in this case seems particularly egregious.  Maybe next they could take on taxicab regulation in New York.

Paul H. Rubin


PAUL H. RUBIN is Samuel Candler Dobbs Professor of Economics at Emory University in Atlanta and formerly editor in chief of Managerial and Decision Economics. He blogs at Truth on the Market. He was President of the Southern Economic Association in 2013. He is a Fellow of the Public Choice Society and is associated with the Technology Policy Institute, the American Enterprise Institute, and the Independent Institute. Dr. Rubin has been a Senior Economist at President Reagan's Council of Economic Advisers, Chief Economist at the U.S. Consumer Product Safety Commission, Director of Advertising Economics at the Federal Trade Commission, and vice-president of Glassman-Oliver Economic Consultants, Inc., a litigation consulting firm in Washington. He has taught economics at the University of Georgia, City University of New York, VPI, and George Washington University Law School. Dr. Rubin has written or edited eleven books, and published over two hundred and fifty articles and chapters on economics, law, regulation, and evolution in journals including the American Economic Review, Journal of Political Economy, Quarterly Journal of Economics, Journal of Legal Studies, and the Journal of Law and Economics, and he frequently contributes to the Wall Street Journal and other leading newspapers. His work has been cited in the professional literature over 8000 times. Books include Managing Business Transactions, Free Press, 1990, Tort Reform by Contract, AEI, 1993, Privacy and the Commercial Use of Personal Information, Kluwer, 2001, (with Thomas Lenard), Darwinian Politics: The Evolutionary Origin of Freedom, Rutgers University Press, 2002, and Economics, Law and Individual Rights, Routledge, 2008 (edited, with Hugo Mialon). He has consulted widely on litigation related matters and has been an adviser to the Congressional Budget Office on tort reform. He has addressed numerous business, professional, policy, government and academic audiences. Dr. Rubin received his B.A. from the University of Cincinnati in 1963 and his Ph.D. from Purdue University in 1970.

One response to Nashville Limo Regulation


    This subject is getting noticed all across the internet, and the only part of the ordinance that is being talked about is the minimum. The problem that most companies are having is with the background checks that the owners and chauffeurs have to undergo in order to get permits for the company, or a chauffeur permit. The ordinance also sets the insurance minimums to $1,000,000.00, and requires each company to issue a certificate of insurance to the Transportation Licensing Commission, and report on such insurance each quarter.

    When I got into this business, just about 5 years ago, was a friend of a friend asked if I wanted to drive a limousine and make some extra money. I asked him what I needed to do? He told me that I needed to get an “F” endorsement on my drivers’ license. All that took was to retake the written part of the drivers’ test, and pay $4.50. So I took the test, passed and now I’m a licensed chauffeur. I then went to the owners’ house, where I picked up the key to the 8 passenger Lincoln Town Car limousine, and the hand written trip ticket, that was left for me in his mailbox. He never met me, nor did he even know what I was wearing, or if I had ever driven anything like that.

    I proceeded to Nashville, where I picked up 12 people to take to dinner, and eventually to the biggest show in Nashville, the CMA Awards Show. At the end of the night, the client put her credit card number on the trip sheet along with a tip. Because the owner of the company couldn’t qualify to take a credit card, he had another limousine company run the card.

    With that said, would you, Mr. Rubin, feel comfortable putting your mother, wife, sister, daughter or son or even a grandchild in a vehicle, that without most of the requirements set in the ordinance, you could only assume they would be safe?