Owen Courreges: The 100-year-old history of Uber in New Orleans

Jitney is probably a word few New Orleanians are familiar with, although historians believe that the work may have originated here.

Back in the early 20^th century, systems of shared taxis, appeared in cities throughout America.  The cost for using one of these shared cabs was usually a nickel, or jitney.  The French Creole term “jeton,” which refers to a small coin or token, is widely believed to have been the inspiration for the word “jitney.”  Accordingly, the word probably came from New Orleans.

The basic scheme behind jitneys was simple:  An ordinary citizen could buy a used car or bus and run passengers around, usually far more cheaply and quickly than streetcars could.  Eventually, some jitney operators formed jitney companies and even jitney drivers’ unions.

Unlike normal taxis, jitneys would ride to capacity and normally along a set route or a semi-set route.  This put them in direct competition with transit.  During peak times, when streetcars were running at-capacity and off-schedule, jitney drivers picked up the slack by pulling up to major streetcar stops and offering to take those ill-served transit users to their destination.

You can see the problem here.  Transit companies quickly started losing money hand-over-fist to the jitney operators.

In 1915 Conrad Syme, corporation counsel for the City of Washington, D.C., came to New Orleans to study the jitney situation.   He reported that jitneys were well-established in New Orleans and advised that Washington could have a similar system.

“There are in New Orleans about 400 individually-owned jitneys, comprising cars of all types,” Syme observed. “There is also a jitney mobile line of 6 or 8 cars, capacity 20, going over a regular route of 2 1/2 miles long.  The individual jitneys are licensed at $30 per year.  They are not restricted routes.”

However, Syme also reported that there was already a push to regulate jitneys.

“The desire is strong here,”  reported Syme, “to have the jitneys confined to certain routes.  I think this will be difficult that so far as jitneys run by individual owners or operators are concerned they should and will only be confined to the routes indicated on the card.”

Syme explained that the jitney mobile line, with buses carrying about 20 people at a time, would desire defined routes.  However, it would seriously harm individual jitney operators.

Adding insult to injury, that same year New Orleans passed laws banning jitneys from picking up passengers within 50 feet of an intersection, and requiring them to purchase an unaffordable $5,000 indemnity bond (approximately $45,000 today).  The slowly increasing regulation was beginning to look like death from a thousand cuts.

It was in the midst of this that the New Orleans Jitney Drivers’ Association was formed to challenge the new laws.

The jitney operators claimed that the new laws were designed to protect the streetcar companies, not the public interest.  Accordingly, they sued in Civil District Court to enjoin enforcement of the onerous new jitney restrictions, particularly the indemnity bond.   They fought the issue all the way to the Louisiana Supreme Court, which upheld the restrictions in 1916 and dismissed the injunction.

Ironically, the New Orleans Light and Railway Company (the company that operated the streetcar lines) was actually damaged by this ruling, as it had started getting into the jitney business.  Ultimately, the decline of streetcar profitability due to jitneys helped precipitate the consolidation of all of New Orleans’ streetcar lines of New Orleans Public Service, Inc. (“NOPSI”) in 1922.

NOPSI took a hard line.  It managed to crush its own rail workers’ union in 1929 following a major strike, and set its sights on breaking the jitney operators.

Because the so-called “anti-jitney” law was so onerous, many jitney drivers had little choice but to operate without complying with its restrictions.  NOPSI responded by filing suit against the rogue operators, claiming that they were losing approximately $6,500 per day in revenue attributable to unfair competition from jitneys.  Ultimately, NOPSI received the injunction it sought and defended it all the way up to the U.S. Fifth Circuit Court of Appeals, which upheld the injunction against the jitney drivers in 1930.

Following the ruling against jitney operators, the Associated Press reported that “[p]olice became more alert in enforcing the ‘anti-jitney’ law” and noted that “[a]dditional arrests of drivers were made.”

This push for regulation was hardly restricted to New Orleans.  Cities everywhere began restricting or banning jitneys immediately after they appeared, and continued to do so into the 1920’s.  The obvious goal was to bolster (or in some cases, to rescue) transit corporations saddled with the monopolistic complacency, union difficulties, and an aging rail infrastructure.

This was ultimately the case in New Orleans, where NOPSI succeeded in effectively killing jitneys before they were banned entirely by modern “for hire” vehicle regulations.

At this point you’re probably wondering what the point of this history lesson has been.  Well, I’ll tell you.  Every time you’re waiting for a bus or a streetcar that never seems to come, this is why.  The city has restricted competition and hog-tied you to a bad choice.  In a perfect world, when RTA dropped the ball, some enterprising buck would pick it up.  That, dear readers, simply is not allowed.  Jitneys are gone and unlikely to return.

We have the same problem with taxis.  How many times have you needed a cab during times of peak demand, only to find none are available?  The city is currently debating over whether we allow Uber, a mobile application that connects people with drivers, to operate in the city.  Alas, voices from certain quarters want to fix minimum prices for Uber at an unreasonably high level to protect cab companies and drivers.

Does this sound familiar?  It’s history repeating itself.  This time, we need to consider whether we’re going to protect entrenched interests or stand up for the public.

Squeezing out competition hasn’t worked in the past.  It’s been awful for consumers and workers alike.  A free and more open market is virtually always preferable to one paralyzed by rent-seeking and overregulation.  What is good for NOPSI, RTA, or the taxi industry is not necessarily good for you and I, the people actually being served.

Hopefully, we understand that more now than we did 99 years ago.

Owen Courrèges, a New Orleans attorney and resident of the Garden District, offers his opinions for UptownMessenger.com on Mondays. He has previously written for the Reason Public Policy Foundation.