Liability Of Taxicab Company For Driver’s Negligence

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 When Can a Taxicab Company Face Liability for an Accident?

If a car accident occurs and a taxicab is involved where a passenger in the cab or other car is injured, they may consider filing a lawsuit. If the driver was negligent and was responsible for the accident which caused injury, then the individual may be able to file suit and recover damages for things like medical bills and lost wages. However, in this situation liability can be more difficult to determine than a car accident not involving a taxicab service.

While most people will name both the driver and taxicab company and defendants in a lawsuit, attempting to recover damages from the driver of the cab can prove difficult in many instances where the driver does not have any money to pay out. This is why recovering from the taxicab company is usually the better avenue. However, the ability to successfully sue a taxicab company will depend on the structure of the taxicab company and their contractual relationship with the driver.

What Needs to be Proved in Order to Recover Damages from a Taxicab Company?

In general, to recover damages from a taxicab company, there needs to be negligence on the part of the driver. That means that if the driver was not acting negligently in their operation of the taxicab, then there can be no liability on the taxicab company. This adds another layer to a lawsuit where the injured party must prove that the driver was the taxicab company’s agent, servant, employee, or co-participant in a joint business venture to offer taxicab services to the public.

This relationship can be established in several different ways:

  • Franchise: Since taxicab services are offered to the public, the company will be subject to regulations. This can vary depending on the specific jurisdiction but often require a franchise, permit, or license before being able to participate in the taxicab industry. Proof of this franchise, permit, or license is sufficient in many jurisdictions to establish liability on the part of the taxicab company.
  • Taxicab Ownership: In many cases, the taxicab company will be the named owners of the cab vehicles as opposed to ownership being in the driver’s name. However, in most instances ownership alone is not sufficient to establish liability where driver negligence is the cause of an accident. If this is the rule in the jurisdiction where the accident occurred, then the taxicab will likely not be held liable for damages caused by a negligent driver that is an independent contractor of the taxicab company.
    • It is important to note that many states have modified their laws to impose liability on the taxicab owner where they give permission to another to operate the vehicle. As such, when a contracted driver for the taxicab company negligently causes an accident resulting in injury to another person, the taxicab driver can be liable for damages like medical bills or lost wages resulting from the accident.
  • Agency: The agency concept goes hand in hand with ownership of vehicles by the taxicab company. Agency refers to an arrangement between two parties where the principal gives their agents the ability to make decisions on their behalf. This essentially means that the agent is acting as an extension of the principal. When there is ownership by a taxicab company, the right to possess and control a vehicle is also established.
    • This gives the taxicab company the means to exercise control over a driver when it furnishes the vehicle to the driver for use to carry out cab services. This can help prove that the taxicab driver was an employee (agent) as opposed to an independent contractor, therefore rendering the taxicab company vicariously liable for the actions of the driver.
    • Evidence like contracts, payment methods, and other written communication between the taxicab company and driver can help establish whether a cab driver is an independent contractor or employee.
  • Taxicab Operator: Proof that a taxicab company held itself out as the operator of the vehicle can also establish liability in some jurisdictions. “Holding out” refers to any signs or expressions by the taxicab company that come to the passenger’s attention and can be reasonably interpreted by the passenger as indicating that the taxicab company oversees the driver. There also needs to be justifiable reliance on this representation by the party who was injured in the accident and now suing for damages.
    • The most common example is having the name or logo of the taxicab company present on the vehicle at the time of the accident. This is generally placed somewhere on the outside of the cab, like the vehicle’s door.

How Does Insurance Play a Part in Taxicab Company Liability?

When an accident occurs, a lawsuit is filed, and the taxicab company is said to be a proper defendant by the court, then the injured party will need to know if insurance is involved. Most often, the taxicab company will carry insurance which will handle disputes surrounding an accident. This means that all or most of the money paid out will be from the insurance company. Counsel for the insurance company may also try to negotiate a settlement to avoid the lawsuit from progressing to trial, especially where negligence is obvious and damages claimed are reasonably related to injuries from the car accident.

If the taxicab company does not carry insurance, it may be a lot harder to recover damages even if the injured party wins the lawsuit at trial. The taxicab company may not have the money or refuse to pay, which could lead to a judgment against the company or even force the company into bankruptcy or business closure.

Do the Same Principles Apply With Rideshare Companies?

Today, more people use rideshare services like Uber and Lyft as opposed to taxicabs. If the driver does not have a commercial insurance policy or ridesharing endorsement on their personal car insurance, then the policy will not payout for the accident. There needs to be more coverage to apply in situations where a service is being rendered as opposed to personal use of the vehicle.

Uber and Lyft do offer liability insurance to their drivers, which gives injured parties another avenue if the driver’s personal insurance company denies the claim. This makes the process simpler to recover damages for injuries suffered during a rideshare service in most cases.

However, if the payout from insurance claim is not sufficient and the injured party tries to take legal action, it may be harder to establish Uber or Lyft as a defendant because the drivers are recognized as independent contractors. More court decisions down the road will likely clarify this emerging area of law.

Should I Consult An Attorney If I Have Been Injured In A Taxicab?

If you have been injured in a taxicab car accident, as discussed above the taxicab company may be held liable. Since this can be a difficult process and require upfront arguments to avoid a motion to dismiss the case, hiring a local personal injury attorney can be very helpful.

An attorney will be familiar with the applicable laws in your jurisdiction, can represent you in court and settlement negotiations, help with collecting judgment, and use their legal knowledge to get the best deal to compensate for your injuries.

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