Proposed law would dismantle Nevada’s limo cartel

As Uber recently found out, Nevada has one of the most anti-competitive licensing laws for transportation companies in the nation. If you want to start a transportation business here, you essentially have to get permission from your competitors first.

Such laws are sometimes called “competitor’s veto” laws, and though they exist in more than half the states, Nevada’s is one of the very worst. The law explicitly directs the Nevada Transportation Authority to deny a license to a business that would “adversely affect other carriers” — as, of course, every new business will. The inevitable effect of the law is to deny economic opportunity to hard-working people who simply want to create jobs by providing Nevadans with safe and reliable transportation services.

Uber was able to get a bill passed that exempted ride-sharing apps from the competitor’s veto requirement, but other companies that do not utilize such apps were left in the dust. Take Reno residents Ron and Danell Perlman.

The Perlmans built a small limousine company from the ground up, starting with just one vehicle. They currently have authority to operate seven limousines in Nevada, and they own nine others that they use for trips in California. Because of increasing demand in Nevada, they applied to the NTA for permission to operate those nine California vehicles in the state. But an existing business protested their application on the basis that new competition would harm its profits.

The Perlmans’ application was then denied because they couldn’t prove to the satisfaction of the NTA that the market would support any additional limousines.

Represented by the non-profit Pacific Legal Foundation, Ron and Danell sued on the basis that the law violates their constitutional right to earn a living free of arbitrary government regulation. In other cases where the foundation has sued, states have reacted by getting rid of the offensive law. Oregon, Missouri, and Montana each passed a repeal bill following lawsuits. Nevada also passed a repeal bill last term, but Gov. Sandoval vetoed it on the basis of purported safety concerns.

Of course, competitor’s veto laws have nothing to do with safety. Even the safest, most hard-working and honest entrepreneurs must be denied a license under competitor’s veto laws — simply because they will compete. If anything, getting rid of the competitor’s veto frees resources for government authorities to enforce laws that actually protect public safety.

This year, Nevada again has the chance to get rid of its anti-competitive law, and to allow people such as the Perlmans to freely grow their businesses. Assembly Bill 240 is pending in the Assembly, and maintains all existing safety regulations while getting rid of businesses’ ability to protest new applications. It also requires the Nevada Transportation Authority to grant licenses to applicants who can prove that they are qualified.

“All we want is to be able to run our company the correct way — grow our company when it’s needed, [based on] supply and demand,” says Danell. She hopes that this time around, the governor sides with free enterprise and justice, rather than crony interest groups.

Published by The Las Vegas Review-Journal