Minimum Limo Service Fees Hurting the Industry

Limo in TampaInstead of going into the taxi business, many drivers opt for starting a limo service instead. Why? Because it can bring in a decent amount of money while being competitive with the taxi industry. Even so, some laws are making it difficult for limo drivers and service providers to get ahead. And with these laws, many limo companies are having to second-guess their approach and may not even be able to last through this tough economy.

Regulations make it so limo companies have to charge at least $45 for any ride, no matter how long that ride will take. As if that weren’t bad enough, additional regulations say cars must be of a certain age with low mileage and limos can’t be dispatched from cell phones.

All of these regulations apply only to limo service companies. Taxi companies can continue to charge however low a rate they’d like, making them the more competitive option most of the time. Unless a passenger needs to take a longer trip, the taxi will always be cheaper. That minimum charge means limo drivers have to charge at least $45, even if the ride lasts only for 5 minutes. This hardly seems fair, don’t you think?

This makes it very hard for limo companies to stay competitive and even stay in business. After all, if a taxi service can undercut them at every turn, it’s difficult to get a leg up. Because seriously, these regulations make it so taxis can almost always charge less and offer a more convenient level of service by allowing cell phone dispatches.

Though it’s not really fair, this is what the law states. And many limo service providers are decidedly up in arms about it, many of which are taking their cases to local and state courts to try and get this issue resolved. Many claim these regulations indicate the government is overstepping its bounds and interfering with the free market economy. Of course, taxi companies see it as a way of holding back the tide of limo companies that could squash the taxi market.

It all depends on what side of the situation you’re on, of course. But one thing is for certain: we’re bound to be hearing more about this issue soon, as more and more companies take their grievances to court and attempt to have these strict regulations overturned. Tennessee and Nevada are just two of the states that currently have regulations like these.

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