While traveling by taxi may be unusual in the suburbs and in rural areas, taxis are a common sight in Chicago’s downtown business district. Taxi cab service is a government-controlled trade within the City of Chicago, with the supply of taxis regulated very strictly through the issuance of city-authorized taxi medallions. There are almost 7,000 Chicago taxi medallions. These official, numbered, metal license plaques are affixed to the top right hood of the vehicles being operated as cabs, and they are required to operate a transport-for-hire business legally within the city limits of Chicago.
With the strict limitation on supply, taxi medallions are a valuable investment, with the average sales price of a single medallion averaging around $340,000 as of 2013. Given this high investment, one might expect that, where a business must invest that kind of money in order to carry on a trade, and with some large cab companies owning numerous medallions, there should be sufficient insurance and financial coverage to compensate victims who are seriously injured in accidents caused by taxi-cab drivers. Unfortunately, however, this is not necessarily so, and trying to recover from a taxi driver or cab company whose driver has caused an injury can be extremely difficult. Even worse, despite the degree of control the Chicago city government exercises with respect to carrying on the cab trade, the City of Chicago has done very little to protect parties injured in accidents caused by taxi cab operators.
Under Chicago ordinances, taxis (along with paratransit and limousine services) are required to carry an automobile liability insurance policy with a minimum limit of $350,000 for combined single limit/each occurrence incidents. While this may seem sufficient to cover damage amounts for many accidents, it is often inadequate, particularly in accidents involving taxi cab collisions with pedestrians, where personal injury damages are likely to be significant.
In particular, pedestrians who have been seriously injured by negligent taxi drivers have found that it is very difficult to recover any of the damages caused by cab drivers and the companies they work for, let alone the amounts designated by insurance limits. This is especially disturbing when you stop to consider that, according to the Chicago Department of Transportation’s Pedestrian Crash Analysis report, within Chicago’s central business district, more than one out of every four pedestrian crashes occurring in 2011 involved a taxi.
Injuries from Taxi Cab Accidents
City-based taxis are notorious for driving aggressively, and Chicago is no exception. Cab drivers can maximize their revenues by carrying more fares, so they often speed during each journey to fit as many fares as possible into a given work day. They will also work extended hours—sometimes more than 12 hours in a day—in order to reap more fares. Further, in Illinois, cab passengers riding in the rear seat are exempted from an Illinois vehicle law that requires all occupants of a vehicle to wear seat belts, and many cabs (that is, those that are not independently owned and operated) are required to have partitions between the passenger compartment and the driver.
Like any other vehicles, cabs are susceptible to the same types of accidents and injuries that one regularly encounters with any vehicle, and cab drivers, cab passengers, and pedestrians are subject to the same types of injuries. However, in addition to the normal risks associated with driving, cabbies have financial incentives to drive more recklessly, and unbelted passengers can slam into partitions or otherwise be thrown around the interior of the vehicle in the event of an accident.
When you factor in aggressive driving, speeding, crowded city streets, thousands of pedestrians, tired drivers, passengers without seat belts, and additional obstacles within the vehicle, the result is that numerous accidents involving taxi cab are bound to happen, and they will inevitably result in some very unpleasant and serious injuries.
Pursuing a Damage Claim Against a Taxi Driver or Cab Company can be Complicated—and Frustrating
Back in 2010, the Chicago Sun Times published an article entitled, “Badly Injured in a Cab Crash? Good Luck Collecting Much.” The tale it told of accident victims trying to seek compensation from Chicago cabbies who injured them was discouraging, to say the least. As noted above, taxi cabs are involved in many accidents and, often, it is the cab drivers who are at fault. Unfortunately, many people do not think twice about climbing into the back of a cab or balk at seeing taxi drivers recklessly speeding by, believing that taxi companies will behave responsibly if something goes wrong. After all, they are all required to carry minimum insurance, and they are part of large, profitable concerns, so they should be able easily to shoulder the costs of any damages they cause, shouldn’t they? As the Chicago Sun Times article pointed out, the answer is not that simple. Unfortunately, many taxi companies have become experts at protecting their assets, and even, sometimes, at protecting themselves from paying out insurance claims. How? Well, one way is by creating multiple corporate sub-entities that virtually guarantee that there are few assets that can be reached by injured parties in the event that a specific driver causes an accident.
For example, the corporate owner of multiple taxi medallions will create a separate corporation, or many separate small corporations, that then turn around and lease the medallions out to individual cab drivers. These individual cab drivers are then treated by the leasing companies as “independent businessmen” who have no direct employment connection to the leasing company, let alone to the company that actually owns the medallions. When an accident occurs, these companies treat the cabbies as if they are “on their own,” and, naturally, these cabbies often have almost no assets that will allow injured parties to recover amounts that exceed insurance limits.
And even when an injured party can get to the next level above the cabbie—the leasing company—he may find that that particular sub-entity only “operates” three or four cabs, and does not itself own any of the valuable medallions. What is more, the companies that own the medallions may use the medallions as collateral for loans, leaving the medallions themselves so saddled with debt that they are almost worthless assets in themselves. At most, then, injured parties are often left with trying to recover from the insurance companies, meaning that the total amount of compensation available is $350,000, which is hardly sufficient when an accident causes a permanent or long-term injury, or when it causes a person to become unable to earn an income.
Abels & Annes Can Help Individuals Injured in Taxi Cab Accidents to Recover Damages
Given the “shell game” that is being played by some cab companies, it is no wonder that people injured by negligent Chicago cab drivers find themselves being overwhelmed and worn down when they try to pursue compensation for their injuries from cab companies—even from some of the largest cab operators. Many of these people simply give up, or settle for a small fraction of the damages to which they should be entitled. That is why, if you are injured by a Chicago cabbie, it is critical to get a qualified personal injury attorney to assist you in seeking compensation.
The Chicago personal injury attorneys at Abels & Annes know how the cab companies operate to shield their assets—even their medallions—through the creation of sub-entities. We know how to break down these structures and, if possible, pierce through the corporate structure to find and hold responsible the parties that should bear the cost for these accidents. It is unconscionable that these businesses should reap enormous profits for operating taxi businesses without facing any of the accompanying liabilities for the harm they cause through running their businesses irresponsibly.
Government regulators, for all that they are willing to reap high revenues from the taxi-cab medallion monopoly they control, have been unwilling to help the many victims of the Chicago taxi business. Until the government shows that it cares how these businesses are operated by eliminating their ability to shield themselves from everything but profits, Abels & Annes will do it’s best to hold these businesses accountable when they cause harm to individuals.
If you are personally injured from an accident caused by a Chicago taxi cab driver, you are likely to get nowhere on your own; you need the assistance of a qualified and experienced car accident attorney who knows how taxi companies operate. If you have been injured in an accident involving a Chicago cab driver or Chicago cab company, call the personal injury attorneys at Abels & Annes at 855-LAW-CHICAGO (855-529-2442), at (312) 924-7575, or use the online form here. The sooner you act, the better.