S.F. jury finds Yellow Cab liable for $8 million crash

A San Francisco Superior Court jury this week found that a Yellow Cab driver was an “ostensible employee,” making the taxi cooperative liable for a car crash allegedly caused by the driver. The jury awarded $8 million to a passenger injured in the crash.

Some legal experts said the finding in Fua vs. Sanchez may have implications for Uber, Lyft and other companies with workforces composed of independent contractors, while other experts said it’s too different to affect those companies. The case also undercuts taxi companies’ frequent assertions that their insurance coverage for passengers is superior to that of the new ride-hailing companies.

Yellow Cab contended that the crash was entirely the driver’s fault and that it bore no legal responsibility because the driver was an independent contractor, according to Todd Emanuel, a Redwood City lawyer who represented the injured passenger, Ida Fua.

Yellow Cab general manager Jim Gillespie did not return a call for comment. But in a deposition this month, he said that Yellow Cab does not provide driving services directly to the public. “The drivers are in the business, obviously, of transporting the people, and we’re in the business of providing the vehicles and/or the dispatch service, the color scheme,” he said, according to a transcript.

Uber, Lyft assertions

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That parallels similar assertions by Uber and Lyft that they are merely technology companies, not transportation services.

Ida Fua, then 28, a first-year associate at a Silicon Valley law firm, took a Yellow Cab home from San Francisco International Airport in April 2011. Traffic on southbound Highway 101 came to a dead stop, but the cab driver didn’t notice and struck the vehicle in front of him at 60 to 65 mph, Emanuel said. Fua was left paralyzed on one side of her body, suffered residual symptoms of traumatic brain injury and is not able to work.

The jury found that the driver was not a Yellow Cab employee, but still was an “ostensible employee,” making the company responsible for his actions. “A passenger getting into a Yellow Cab legitimately assumes that there is a company that stands behind that vehicle and its driver,” Emanuel said.

Emanuel said Yellow Cab, which carries $1 million in liability insurance, “is grossly underinsured.” Uber and Lyft also provide $1 million liability insurance while drivers are carrying passengers or en route to pick them up, and a lesser amount while they are awaiting ride requests.

“The problem is, what happens in a case where you have damages in the millions and millions of dollars?” Emanuel said.

Control over worker

William Gould, a professor emeritus of law at Stanford Law School, said the case demonstrates “what a thin and sometimes artificial demarcation line there is between these two concepts” of employees and independent contractor. The determining factors are how much control the company has over the worker, and how much entrepreneurial opportunity the worker has, he said.

If individuals are employees, their companies bear liability, he said. “The only way liability could be avoided would be to say that the so-called independent contractor is truly a separate business on his/her own.”

San Francisco attorney Christopher Dolan is suing Uber over a crash in which an UberX driver who was allegedly awaiting ride requests struck and killed a child in San Francisco. He said he expects that Uber would say that cabs differ from UberX in multiple ways: cab drivers work full time, pay the companies a daily rental fee, drive cars emblazoned with the cab company name and are more heavily regulated than Uber. “Uber will try and differentiate itself, saying it’s a lynx, not a cat,” he said.

Tamara Devitt, a labor attorney in Orange County, said the Yellow Cab case sounds like one in which a jury wanted to find for the victim of a horrific crash and that it doesn’t have much relevance for Uber and Lyft.

The concept of “ostensible employment” revolves around the appearance of employment, she said. That is not relevant for Uber/Lyft drivers because they don’t represent themselves to passengers as being company employees, she said. Instead, Uber/Lyft drivers’ employment status is grounded in how much control the companies have over them.

In March, Yellow Cab of Chicago was found liable for $26 million in damages to a passenger who was severely injured in a cab crash. The company filed for bankrupty protection nine hours after the verdict. Its president told news organizations that it could not pay the bill.

Carolyn Said is a San Francisco Chronicle

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csaid@sfchronicle.com Twitter: @csaid