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Driving the Poor Out of Business
by John H. Fund
Thursday, July 17, 1997

John H. Fund is a member of the editorial board of The Wall Street Journal and a contributing editor of IntellectualCapital.com.

New York Mayor Rudy Giuliani has joined those who believe that the right to earn an honest living is one of America's most precious civil rights. He is leading a frontal assault on an outdated law that is cutting off the bottom rungs of the economic ladder for dozens of struggling inner-city entrepreneurs.

A safe and easy method of transportation

Giuliani NY Mayor, Rudy Giuliani
The situation is as follows. Using the force of law, New York City's public transit monopoly is blocking van or jitney services from competing against it -- despite the fact that vans both PUT people to work and TAKE people to work. Giuliani will have none of that. This past Monday, Mayor Giuliani vetoed the City Council's attempt to disapprove Vincent Cumming's application for a van service. Cummings' Brooklyn Van Lines provides door-to-door service and is of great aid to the elderly as well as single women who fear having to walk down dangerous streets for sporadic city bus service.

Cummings played by the rules and applied for all the proper permits to supplement the city's fixed route bus and and subway system. He won approval from the city's Taxi and Limousine Commission (TLC), but his application was unanimously rejected last fall by a New York City Council committee.

When Cummings arrived for the vote he found the president of the Transport Workers Union seated as a guest of honor and the spectator seats packed with union members. He was then told there would be no vote because the TLC had withdrawn its approval of his application. The TLC would only say that it was reversing its position because of the "manner of operation of the vans and the effect on mass transit." In other words, the city's transit monopoly trumped the interests of poor people needing a lift.

This summer, Cummings tried again and submitted 938 statements from business groups, churches, commuters and young mothers testifying to the need for his service. This time he got a vote -- the City Council rejected his petition for a van service by a vote of 46 to 2. Giuliani has bravely decided to take on the City Council on behalf of the van drivers. In vetoing the City Council's action he said Cummings and companies like his were "great competition. I think they are right, and in this particular case, the city is wrong." It will be interesting to see how the City Council reacts to Giuliani throwing down the gauntlet. The votes should be there to override his veto, but will the mayor's demonstration of public support shift some votes?

Public transportation vs. jitneys

Jitney services such as those run by Cummings are popular with poor or elderly residents in many cities outside of New York, making this a battle with national consequences. Indianapolis and Los Angeles are thinking about allowing jitney services of their own and are watching the Cummings case closely.

Jitneys once flourished in America; in 1915 there were 62,000 jitneys operating in 175 cities. Then streetcar companies began campaigns to outlaw them, and within a decade jitneys were gone from almost every city. Public transit's hostility to jitneys is still intense. In New York City. only five new van applications have been approved since the City Council passed a law in 1994 dramatically restricting their operations.

Today jitney services can only offer pre-arranged service. If they pick up passengers from the street or cruise on any public bus route their vans can -- and are -- confiscated by police. "Since just about every street is part of some bus route, I'm under constant threat," says Mr. Ricketts, an immigrant from Jamaica, who operates his own jitney.

The larger question

Anti-Jitney laws vs. economic opportunity
The New York law is being challenged in court by the Institute for Justice, a Washington-based free-market law firm that fights for economic liberties for the poor. It filed a suit against the city and state of New York arguing that anti-jitney laws infringe on the basic right of people to earn an honest living. When the Institute joined with the Landmark Legal Foundation and went to bat for a jitney operator in Houston in 1994, a federal court struct down that city's anti-jitney law. It turned out the law had been passed in the 1920s with the express intent of driving Hispanic jitney operators out of business so the Anglo-owned transit companies would have a monopoly.

Chip Mellor of the Institute for Justice believes the New York lawsuit he's filed will prevail, but he says the real story is that there are thousands of other laws limiting economic opportunity cluttering the statute books of almost every major city in the country. Traditional civil rights groups profess great concern about the plight of people who will soon be limited in how long they can stay on welfare. They would do much to advance both the cause of civil rights and the interests of the poor if rather than let pubic unions suppress hard-working people, they followed the lead of the new welfare bill and supported policies that replace dependency with mainstreaming recipients into gainful employment. Van services like those of Vincent Cummings would be a good place for civil-rights groups to visit and learn from.


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