Regulatory Policy

A Victory for Transit Competition

New York's City Council has reversed course and allowed a Caribbean immigrant and fledgling entrepreneur to operate a private van service in Brooklyn. Some restrictions still apply, but the limited policy change by the city's politicians is hailed as a victory for minority free enterprise.

  • Seeking to shelter the city's public transit monopoly from competition and bowing to labor union demands, the council had previously voted 46 to 2 to deny Vincent Cummins the right to offer van services to mostly minority riders.

  • The reversal came after widespread publicity about the case, which became a rallying point for those who believe rules and restrictions in many U.S. cities frustrate efforts by minorities to establish very small businesses.

  • The license granted Cummins allows him to operate 20 vans -- which will provide 40 jobs -- at a savings of 50 cents per ride compared to fares on the city's erratic and undependable buses.

  • Still, the City Council is imposing a moratorium on any further applications to provide jitney services, pending a study of the vans' impact on public transit.

While Cummins' vans must meet all safety and insurance requirements, the city's busdrivers are reportedly allowed to continue picking up passengers even with as many as 103 accidents on the drivers' records.

New York's law continues to prohibit vans from providing door-to-door service unless it is prearranged, but the Institute for Justice has filed suit to overturn the law completely. A federal court in Houston struck down that city's anti-jitney law in 1994 -- holding that it existed to protect the local transit monopoly.

Source: Editorial, "The Vans Roll," Wall Street Journal, August 13, 1997.


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