According to Forbes contributor and Communications Associate for the Institute of Justice Nick Sibilla, The Georgia Supreme Court unanimously upheld a lower court’s ruling dismissing a lawsuit alleging that a bill which allowed Uber and Lyft to operate in the state was unconstitutional.
The complaint by taxi companies centers around state law that requires taxi companies to operate under a “medallion system.” These “medallions” or “certificate of public necessity and convenience” (CPNC) permit taxi drivers to operate within a city or town. Over 20 years ago, the city of Atlanta determined that it would only allow 1,600 medallions for that city.
The cost of obtaining a medallion sat as high as $80,000 in 2015, according to the Atlanta Journal-Constituion.
However, Georgia lawmakers passed House Bill 225 (HB225) in 2015, opening the door for ride sharing companies such as Uber and Lyft to operate freely on the state level, preempting local laws that burdened the companies. While HB225 banned the creation of new medallion systems on the local level, it allowed medallion systems already in place to remain. Modern ride-sharing companies are not burdened by this system at all, and the resulting increase in competition saw a massive decrease in business for the taxi companies, who couldn’t keep up with the cleaner, and more convenient business models of Uber and Lyft.
Able to operate more freely, ridesharing has quickly overtaken traditional cabs. For instance, in the first few months after Atlanta allowed Uber and Lyft to pick up riders at Hartsfield-Jackson International Airport, the two companies transported over 250,000 passengers—more than twice as many riders that taxis picked up.
Drivers also seem to prefer ridesharing. According to the Brookings Institution, the ground transportation industry added almost 3,000 jobs in the “gig economy,” a rise by 64.5 percent. In contrast, payroll employment fell by 4.2 percent, during the same period, from 2012 to 2014.