Metro faces allegations of limiting competitive prices - WSMV Channel 4

Metro faces allegations of limiting competitive prices

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NASHVILLE, TN (WSMV) -

A federal judge has called the city of Nashville's actions "fishy" and is now sending an alleged price-fixing case to a jury trial.

It is small business vs. big city government and free enterprise vs. government regulation all playing out on the streets of Middle Tennessee.

At issue is whether the government can tell a small, private business how much to charge its customers.

This all began when Ali Bokhari had an idea to charge taxi cab prices but deliver passengers in black Lincoln Towncars. By doing so, he could undercut the big limo services while cutting into the bargain taxi prices.

By 2010, he had 30 cars charging $25 for airport rides.

However, Metro then stepped in and set a minimum rate of $45 for all car service from the airport.

That changed everything, and Bokhari's company, Metro Livery, is now down 15 cars.

"We are struggling, but we are optimistic," he said.

The Institute for Justice in Washington, DC, then sued on behalf of Metro Livery and other discount car services, accusing the city of Nashville of unconstitutional price fixing.

Metro Nashville says it's just trying to protect its customers and ensure safe, reliable service.

"Because of problems with illegal taxi services, we want to make sure we differentiate the services between taxi cabs and livery services. We can use one or two measures - one is strict prearrangement, and another is minimum rate," said Brian McQuistion, with the Metro Transportation Licensing Commission.

Federal Judge Kevin Sharp refused Metro's request to throw out the lawsuit. In fact, Sharp appears to be leaning toward the other way.

The judge called Metro's alleged price fixing "fishy" and said it will be for the jury to determine whether enactment of the ordinance passes the "smell test."

The case goes to trial in three weeks. If victorious, Metro Livery will return to its $25 airport rate.

The Institute for Justice said it took this case because it believes Metro government was using its power to protect groups from competition.

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