Taxicabs — Beware!
Enter at Your Own Risk

By:  Ronald A. Kovler, Esquire

Every taxicab in Philadelphia should be required to have the following posted warning:


The implications for the victim of an uninsured cab driver’s negligence is obvious to the seasoned practitioner. How in the name of mandatory auto­mobile insurance coverage could this happen and what can we do about it? Cab companies do purchase insurance but their policies of insurance only provide coverage for listed drivers and specifically excludes non-listed drivers, such as independent contractors. It might not surprise you to know that the vast majority of taxi cab operators are lease drivers or “independent contrac­tors.” Invariably, when an accident does occur with a non-listed driver behind the wheel, the insurance compa­ny denies coverage.  The “independent contractor” driver – living off a shoestring – usually has no insur­ance and probably has no idea or concern as to whether or not there is insurance coverage.

Since there is actually a policy of insurance in place, technically, and arguably, the cab company has complied with the law. However, as one of our members, Alan Schnoll, astutely pointed out, “an elaborate shell game is being perpetrated on the public because both the cab companies and their carriers know exactly what is happening. They are apparently happy with the cur­rent status. Only the injured party loses.”

The shell game does not stop there. It gets better or actually worse.

Those same cab companies, operating in the Philadelphia area, do so under an umbrella of under-capitalized intertwined corporations obviously designed to shield the cab company’s assets from attachment. The most valuable of these assets is the “medallion,” the license to operate, which is valued at approximately $90,000.00. (By comparison a medallion in New York is approximately $400,000.00.) Depending on the number of medallions that a cab company has, the value of their assets could be considerable.

Suppose, then, on behalf of your clients, you sue the driver and cab company by Summons take discovery in aid of preparation of the Complaint.  It would not take long to determine the various entities and their inter-relationship. You will find on page 9 a chart depicting a typ­ical Philadelphia cab company with its maze of part and subparts.’

If you have a hard time figuring this chart out, that’s exactly the point. It is submitted that a jury would come to the inescapable conclusion that despite this charade or because of this charade, each one of these companies are really one and the same and should held responsible and accountable.

We, as trial lawyers, can make a difference by pushing the enve­lope in discovery. Moreover, by aggressively pursuing these cases we will be sending a clear message to the cab companies to make sure that they are insured adequately. We must as a group also bring this matter to the attention of the Insurance Commissioner, to the Public Utility Commission and to the legislators to do what is neces­sary to put and end to this cha­rade designed to deny our clients compensation they rightly deserve.

In the mean time, beware!

(The names of the companies have been changed and fictional­ized)