LINDA WERTHEIMER, HOST:
We're used to cities regulating taxicabs and protecting hapless tourists by setting a maximum fare. In several cities, including Houston and Miami, limousines and town cars have to charge a minimum rate that is more expensive than cab fare. Portland, Oregon also requires this.
And as Deena Prichep reports, little companies there are crying foul.
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DEENA PRICHEP, BYLINE: With just over half a million people in the city itself, Portland is not really a major metropolis. When you look at the downtown streets, like this one, you see more bikes and busses than taxis and town cars. So when Mike Porter wanted to drum up business for his town car company, he did what a lot of businesses do - took out a Groupon ad.
MIKE PORTER: We thought it as a great idea to get our name out there to the metro area. It was a huge success, we got over 600 and some rides based off this one promotion.
PRICHEP: But he also got something he didn't expect.
PORTER: Two days later, we got a letter from the City of Portland that we were fined over $600,000 because we had broken the rule that we had to charge at least $50 or 35 percent higher than what taxis charge.
PRICHEP: Porter did not have to pay the fine in the end - he just refunded all of the coupons. But he thinks the rule is unfair, and, along with a Portland-area limo company, is trying to overturn it.
PORTER: We're filing a lawsuit because it's unconstitutional for the City of Portland to say to us that we have to charge the citizen more money because they want to protect one class of business.
PRICHEP: The City of Portland won't comment on the lawsuit. But cab driver Red Diamond, who's been working in Portland for about 20 years, says there's a reason for the regulations: taxis aren't just businesses. They're part of the city's transportation system.
RED DIAMOND: We get drunks off the road, we provide emergency roadside response, and we are in many cases, the primary sources of mobility for people who otherwise don't drive themselves.
PRICHEP: And cabs are always available because of city regulations.
DIAMOND: They're required by law to operate 24 hours a day, seven days a week, 365 days a year, citywide. Taxis are required by law to maintain 10 percent of their fleet in wheelchair access vehicles. Taxis are also required to service all trips, including short trips, that are otherwise economic washouts for the drivers.
PRICHEP: But short trips and late night shifts come at a cost. A recent study from Portland's Revenue Bureau found that drivers net well below minimum wage. But the study pointed to other factors as well - a glut of drivers, limited permits, and high payments back to the parent companies.
Some cab drivers, like David Aguilar, think that restrictions on limos and Town Cars aren't the solution.
DAVID AGUILAR: If McDonald's decides to sell a hamburger for 75 cents, Burger King cannot go over there and sue them because they're selling a hamburger for $2, or tell the city to enforce McDonald's to sell their hamburger for $2, the same as Burger King.
PRICHEP: But cab drivers like Red Diamond say that these rules are a necessary part of protecting the taxi industry. And if you don't have them in place, he says, it's harder to serve low-fare rides.
DIAMOND: That means like elderly people that have to go out and get groceries, that means people that just have to travel short distances to a medical appointment. And if the town cars run roughshod over this industry, they take only the airport runs, and they leave us to kind of pick up the breadcrumbs, as it were, that's not a good model for serving the needs of the community.
PORTER: This does not protect the citizen at all. This only protects taxicab companies and their profit.
PRICHEP: Again, town car owner Mike Porter.
PORTER: What we're trying to do is just be able to advertise our services at a discounted rate to be able to show people hey, you have options other than just taxis.
PRICHEP: The City of Portland has until July 24th to respond to the complaint.
For NPR News, I'm Deena Prichep, in Portland, Oregon.