Cautionary Tales For Taxi Riders*

by Caryl Avery

When Christian and I emerged from the Russian Tea Room, it was raining and close to midnight. So instead of walking the few blocks to my apartment, we crossed 57th Street and grabbed a cab going west. Christian climbed in first and gave the driver the address, on Central Park West. The driver repeated it. “Right,” we said.

So what went wrong? To this day, I don’t know. All I remember is that instead of driving to Eighth Avenue and making a right, our cabbie started to turn left at Seventh. A split second later, I was covered with blood—my blood. My face had smashed into the Plexiglas divider between the front and back seats, and I could put my index finger through the cut over my upper lip and touch my teeth—a terrible experience for anyone, but especially for a rather attractive young woman.

There were two impacts (three cars were involved, I’m told), then lots of screaming—not by me or Christian but by the drivers. Typical New York scene. It was ten or fifteen minutes before someone—not our cabbie—bothered to ask if anybody was hurt. Yes. Badly. A few minutes later, an ambulance was carrying us to Roosevelt Hospital, where, fortunately, I have some connections. The plastic surgeon the staff suggested was Susan Craig—to my relief, someone I knew. To me, at 3:30 a.m., she was a godsend.

One hour and thirteen stitches later, the inch-long, clear-through gash had been closed and the several other cuts on my face cleaned. Then it was Christian’s turn. No stitches for him; where he’d been cut, there wasn’t enough skin left to sew together. Then tetanus shots for two, some forms to fill out, and home…not by taxi.

It was 6:25 by the time I walked into my apartment. Over the next 24 hours, my eyes got blacker, my bruises bluer, my lip bigger. Then the front tooth that miraculously hadn’t been knocked out began to make its presence felt. The pain was so intense that it was two weeks before I could eat anything other than liquids, and then I had to content myself with mush. But none of this came close to the horror I felt each time I inadvertently caught a glimpse of myself in the mirror.

So now you’ll understand my outrage when, several days later, the negligence lawyer I retained told me that my injuries were the good news. The bad—and what carefree cab riders probably don’t know—is that in most collisions between passengers’ rights and the rights of the taxi industry, passengers lose. Here’s why.

Whose fault was it anyway?

The law doesn’t care whose fault it was—at least as far as any medical bills are concerned. My lawyer, David Commender, explained that New York State’s no-fault law provides that if you are injured in an automobile accident you will be reimbursed up to a total of $50,000 for medical expenses and loss of earnings combined, regardless of who was at fault. Medical expenses are paid indefinitely, as long as they are related to the accident, but loss-of-earnings payments stop three years from the date of injury.

The problem is that the most an accident victim can collect for loss of earnings is $36,000 (a maximum of $1,000 per month for up to three years), and medical expenses are reimbursed according to a workers’ compensation schedule that pays far less than most doctors charge. Indeed, says Susan Craig, the payments are so small and the paperwork so onerous that some doctors won’t take no-fault patients at all. And it doesn’t take a genius to figure out that if you are permanently disabled or injured seriously enough to collect $36,000 for lost earnings, there won’t be much left in that $50,000 pot for medical expenses.

In return for giving us this no-fault arrangement, the Legislature saw fit to take something away—the right to sue and recover, unless you sustain a “serious” injury. Now, to me, serious is the sight of my blood streaming down the front of my best summer suit. But, explains Commender, the law considers “serious” only these things: death; loss of fetus; fracture; permanent disability, such as the loss of a body part; permanent disfigurement; or inability to attend to your usual duties or occupation for at least 90 of the 180 days immediately following the accident. In other words, if my face had not been permanently scarred, I’d have no case. No matter that I missed work, was forced to cancel a vacation abroad, couldn’t eat properly for three months, and would have to stay out of the sun for an entire year to prevent my scars from burning; no matter the pain I endured—tell it to the judge. But unless the injury is “serious,” he’ll say “sorry.”

Not that suing will necessarily make that much difference in cab cases anyway. Most New York taxies, in Commender’s experience, carry the minimum liability coverage required by law: $10,000 for bodily injury to one person in any one accident, $20,000 for injury to more than one person, and $5,000 for property damage. This means that if you are a passenger in a taxi that carries the “statutory requirement,” known in the vernacular as ten/twenty and five (or simply ten/twenty), and you break (or worse, lose) a leg in an accident, the most you can collect is $10,000. And after your lawyer takes his or her third (most personal-injury lawyers work on a one-third contingency basis) and is reimbursed for expenses, you’ll wind up with something like $6,200.

Suppose your spouse and your two kids are in the cab with you, and all of them sustain injuries comparable to yours. The most your family could receive is “$20,000—minus legal fees and legal expenses. We’re not talking about reimbursement for medical expenses now: Those, or some small portion of them, would be covered by no-fault. We’re talking about what you stand to recover for pain and suffering, or permanent disability: the fact that your tennis days are over, or that you’ll always walk with limp, or, as in my case, you’ll always have a seam over your lip.

And what if your child winds up in a wheelchair or a bed for the rest of his life? If the cab has only ten/twenty coverage, those piddling awards are all you’ll get. (In the case of death, you could recover up to $50,000 for one person, or up to $100,000 for two or more people killed.)

Ah, you say, you can still go after the driver and the cab company. You can, in theory. But to understand where theory and reality part company, you have to know a little about the structure of the New York City taxicab industry.

When I say “taxi,” I’m talking about the 11,787 yellow medallion taxicabs, not the estimated 40,000 gypsy cabs that cruise the five boroughs, often with no insurance at all. Of the medallion yellows, all of which are licensed by the Taxi and Limousine Commission, there are approximately 5,000 independent owner-driver cabs, 5,000 mini-fleet cabs, and 1,800 fleet cabs. An independent cab is usually driven exclusively by its owner, though sometimes he leases the cab to a second-shift driver. A mini-fleet consists of two cabs, owned by two individuals who buy two medallions and set up a corporation. These cabs must be on the streets for two ten-hour shifts a day; usually the mini-fleet owners drive one shift and lease the cars for the second one. Fleet cabs (owned and operated by New York’s seventeen fleet companies, ranging in size from 60 to 285 cars) must also be driven twenty hours a day.

Now the owner-drivers of the independent cabs and the mini-fleets may have some assets that you could go after in a lawsuit, but the majority of cabdrivers—those who merely drive for the independent owners and the minis and the fleets—probably don’t have any substantial assets. If they did, I assume they wouldn’t be driving cabs.

But those big fleets have assets, don’t they? True. After all, every fleet medallion is worth about $72,000. Unfortunately, however, a cab company is permitted, for insurance purposes, to divide its cabs into many separate corporations. This insulates the rest of its fleet from liability should one of its cabs be involved in a catastrophic accident.

It is possible, theoretically, to “pierce the corporate veil”—that is, to show that the company is really one corporate entity and that setting up all those separate corporations was merely a ploy to avoid liability. But, says Alan Rachlin of the New York State Insurance Department, “I have no knowledge of anyone’s ever piercing the corporate veil in the case of a taxi company.”

Some cases in point

The taxi industry insists that all of this is moot anyway, since, according to Taxi and Limousine Commissioner Jay Turoff, only “a very minute number of cabs carry ten/twenty. Our records indicate that most independent owner-drivers and mini-fleets carry $100,000/$300,000. Most of the large fleet are what we call ‘self-insured’ for the minimum—ten/twenty—but they also carry ‘excess’ insurance. (This means that should a jury award damages of more than the ten/twenty minimum to an accident victim, the company writing the excess policy will pay the award, up to the limit of that policy.) And speaking up for the fleets, Ronald Stoppelman, president of the Metropolitan Taxicab Board of Trade and owner of the largest fleet in the city, says, “Every fleet carries excess insurance to $300,000; in my case, it’s $500,000.”

Sounds good. So what’s the problem? Only the fact that all eight negligence lawyers I interviewed insist that the majority of the cabs in the cases they’ve dealt with have had only the minimum insurance—and no excess insurance. Here’s a case cited by attorney Jack Goldstein of Cohen, Friedman, Goldstein and Raphael:

Suniga v. Pead Cab Corporation. Three years ago, Carmen Zuniga, 31, was struck by a cab as she walked across Park Avenue. She was hospitalized for a month with a severely fractured leg; her medical bills alone exceeded $30,000. Knowing there was only a $10,000 policy, Goldstein decided to take the case to trial, hoping that at the last minute he’d find out that the company carried excess insurance. But there was no excess. On the eve of the trial, after a jury had been selected, the owner-driver of the cab offered to kick in $25,000 out of his own pocket to protect his investment. The case was settled for $35,000. Had there been adequate insurance, says Goldstein, it would have been worth $250,000, since Zuniga will always have limited use of her leg.

And Fred Queller of Queller, Fisher, Block & Wisotsky and president of the New York State Trial Lawyers’ Association sets forth this case, just one of dozens of taxi-accident cases that he has tried (the majority of which involved minimum insurance):

Goldsmith v. Pin Cab Corporation. Lillian Goldsmith, 43, sustained injuries to her head, neck and lower back when she struck her head on the roof of a taxi after sitting on a piece of metal protruding from the backseat. Some months after the accident, she was hospitalized for three weeks for therapy related to her injuries. Her medical bills exceeded $10,000, and her loss of earnings came to almost $6,900. According to Queller, the taxi corporation—self-insured for ten/twenty—refused to pay those expenses, as required under the no-fault law, until it was compelled to do so by arbitration. Goldsmith’s lawsuit for pain and suffering was settled for $10,000, paid out in nine monthly installments.

Since most of the large fleets are self-insured, passengers hurt in fleet cabs may expect additional frustration when it comes to recovering damages for their injuries. Self-insured cab companies, like the one involved in the Goldsmith case, do not pay premiums to an insurance company; rather, they post a bond that guarantees to the riding public that all claims will be paid, just as if they carried the minimum insurance required by law. (If the cab company defaults, the bonding company will pay.) But, Queller notes, a self-insured owner “is going to be much more resistant to paying because it’s ‘his money.’ The fact that he didn’t pay premiums all along, he forgets that. All he knows is that you want $10,000 out of his pocket, and he’s going to fight you a lot harder than if it were a liability company that had to pay.

“When you finally do settle,” Queller complains, “they say, ‘We have a cash-flow problem; we need ten months to pay it out.’ By the time you’d finish hearings, more than ten months would have elapsed anyway. So you take the payout—it’s a practical matter. In the Goldsmith case, or any one of these cases, I’d give a check out of my own pocket not to get me involved. It cost my firm over $10,000 in labor; it would have been cheaper to pay her the ten grand myself. These cases are heartbreaking to the client and the lawyer too.”

Making it tough for the victim

These cases, Goldstein insists, “are not atypical. They happen every day of the week.” He should know; in his 35 years as a lawyer, he has handled some 250 taxi-accident cases. In 80 percent of them, he says, the cabs had ten/twenty coverage.

What if you don’t want $10,000? What if you want justice? Your car was creamed from behind by a cab; you suffered a broken wrist and facial cuts that left you permanently scarred. You insist that your lawyer try the case and, if you win more than $10,000, recover the balance by going after the defendant’s assets. You go to trial and win a $45,000 judgment.

Here, Queller says, is what would happen: “They would automatically file a notice of appeal. If you win the appeal (which could take two years), they may have the right to file another appeal. You gotta pay for those appeals—gotta buy the testimony, the records. That’s thousands of dollars in disbursements, which come off the top.” But you win. “You then have to start supplementary proceedings to garner information about what assets they have—take testimony from the officers, do searches of banks; it’s a whole different ball of wax. You don’t just get the money because you have a piece of paper. You have to find the assets to know where to send the marshal out to attach them.”

Goldstein asks, “Do you know what kind of work this is? Who’s gonna pay for this?” You are. “These cases are handled primarily on a contingency basis; the lawyer is hired only to sue somebody and prosecute the claim, not to collect the judgment. Queller adds, “You’re talking about another two, three, four years of work. To try to get that extra $35,000 could cost you $35,000. So in the world of reality, if you’ve got a $45,000 injury and there’s only $10,000 insurance, you take it; you settle, because at least the client gets the money.”

And forget about going after the cab’s medallion, just in case that seems an obvious move. In the City of New York, a medallion has never—repeat, never—been seized as a result of a judgment. The cases simply don’t get to judgment; they’re settled first. Why? Because the time and legal expenses involved—and the relatively small amount the accident victim would probably realize from seizing a medallion that most likely is mortgaged to the hilt—usually make it foolish to go this route.

What to do about all this

Eighteen people were killed and 6,293 injured in New York City taxi accidents in 1983. What can you do, besides pray, to protect yourself from harm? Or, if you are hurt, how can you increase your chances of getting fair compensation?

Flee the fleets. Riding in fleet cabs is more risky than riding in owner-driver or mini-fleet cabs—probably because fleet drivers have no vested interest in the cabs they drive and tend to drive fast to make money to cover the high lease fees they lay out. Even the insurance industry recognizes differences in the safety performance of the various categories (owner-driver cabs are statistically safer than mini-fleets, which, in turn, are safer than fleets) and reflect these differences in the rates charged. The rates for fleets are so astronomical that their operators find it more economical to self-insure. And in non-fleet cabs, you probably won’t have to worry about Plexiglas dividers, like the one that did in my lip. Non-fleet taxis aren’t required to have dividers, and most of them don’t.

Granted, when you just have to get a cab—any cab—you’re not going to pass up a fleet taxi. But when you can make a choice, wave the fleet cabs on. (They always have a Plexiglas divider and a notice on their front doors about the additional 50-cent charge at night. Fleet cabs never have “on radio call” signs.)

Speak up. How can you get reckless drivers to slow down? Since their egos are involved, even polite requests sometimes make them step on the gas. The most useful advice I gleaned from cabbies was to explain your request—at the start of the ride, when it sounds like a request, not criticism. “People who ask you to go slow (mostly women) always have reasons: They’ve just been in an accident, they have a headache. It works; if they have a good reason, I’ll slow down,” says one. (Tip: If you don’t have a good reason, make one up.)

Get belted. Many New Yorkers aren’t even aware that taxies have seat belts. They do—front and back—in accordance with federal law. The problem is, they disappear behind the seats and generally surface only for TLC inspections. Hunt for one, and use it. “I always put on a seat belt when I get in a cab now,” says Michael Lenauer, an associate director of the Fund for the City of New York, who broke his nose on the divider when his cab hit another car. “I’ve gotten out of cabs if I couldn’t find the belt.”

Buy underinsurance. If you own a car in New York State you may buy “supplementary uninsured-motorist coverage” (also known as “underinsured-motorist coverage” or “underinsurance”), up to the bodily-injury-liability limits of your own policy. That is, if you carry 100/300 liability insurance to protect others, you are entitled to buy 100/300 in underinsurance to protect yourself in case you’re involved in an accident with an underinsured driver.

Say you have 100/300 liability and the same amount of underinsurance. Say you are negligently struck by another driver who carries only ten/twenty. If you went to court and obtained a judgment against the driver for, say, $100,000, you could collect $10,000 from his insurance company and the remaining $90,000 from your own. The key word here is “negligently”; the other driver must be found liable for the accident. If you were at fault, you don’t get the benefits.

Get a negligence lawyer—fast. A good one will send an investigator out immediately, before crucial evidence (skid marks, potholes) disappears, and will caution you against saying anything to the cab company’s investigator, who is sure to call. Even if you think your cabbie was totally at fault, make sure your lawyer sues the other driver (if there was one). Should a jury find that other driver even 1 percent negligent, you could collect the entire judgment from him, if he is more adequately insured.

Press for change. The minimum liability insurance requirements for motor vehicles have not changed in New York State since 1957. However, there’s a bill before the State Legislature that would increase the minimums from ten/twenty and five and $30,000/$60,000 and $10,000. This legislation (Assembly bill No. 1296, introduced by Helene Weinstein of Brooklyn and awaiting action by the Assembly) was proposed in large measure to protect passengers and pedestrians injured in taxi accidents. Says Weinstein, “The problem is that the people who ride in cabs tend not to own cars, so they don’t have car insurance that would help compensate them in case of injury. My bill would raise personal-injury liability benefits to levels that nearly reflect what those injuries are worth today.”

Unfortunately, though the Assembly has passed similar measures introduced by Weinstein every year since 1982, companion legislation introduced in the Senate has never made it to the floor. It has been “held in limbo,” according to Weinstein, by opponents who contend that it would push up insurance premiums and as a consequence put more uninsured drivers on the roads.

If you think that 28 years is long enough to go without increasing the statutory requirement, you can help bring about a change by writing to senate Majority Leader Warren Anderson and also to the Senate Insurance Committee (address for both: The State Capitol, Albany, New York 12248).

The taxi industry boasts about a recent study that found the average hail time for a New York City cab to be five minutes. That’s five minutes to think about whether you really want one.

*Originally published in New York Magazine, March 4, 1985.