Last night the council passed a bill that cut the minimum fee for limo's or black cars from $45 to $9. 75. This will make it possible for app-based services like Uber, Sidecar, and Lyft to enter the Nashville market. It also means that the long-term effort to stamp out "black sedans" is over.
In 2010, Nashville passed the $45 minimum to protect luxury limousine companies from the new competition of "Black Sedans." Black sedans is a service that is something between a taxi and a limousine. Black Sedans are much cleaner and nicer than the average taxi but they are not as ostentatious as a limo. When this new type service entered the Nashville market, the city went all out to put them out of business, forcing them to operate like a limo company. Not only did the city impose a $45 minimum fare when black sedans had been charging only $25, they restricted there fares to only one an hour, required central dispatching, restricted the age of vehicles in service and engaged in a policy of harassment and intimidation of black sedan operators. Our shameful effort to protect the limo companies from competition became a national scandal.
With the new convention center, Nashville now needs more transportation and transportation options. Those in the tourist industry realize this and advocated a change in course to remove barriers to entry in the Nashville market. I would prefer that there be no minimum fee. However, a $10 fee is so low, that it will have little effect. I doubt a service like Lyft or a black sedan would provide a fare of less than $10 in any event. I don't think those in the Council who previously supported price-fixing have had a philosophical change of heart, but they are bowing to the practical reality that crony capitalism and price-fixing protectionism can not meet the needs of our booming tourist industry. Whatever their motivation for doing so, they are doing the right thing.
Below is the Tennessean's report on this story:
A proposal to dramatically reduce the minimum fee to hire limousines and black-car services in Nashville moved closer to approval Tuesday, meaning a national company that uses a smartphone application to connect riders with vehicles could enter the market soon.The Metro Council supported the legislation on the second of three required readings. It could win final approval as early as Jan. 7.