DALLAS -- The state of Texas is ratcheting up the pressure on Yellow Cab following an ongoing News 8 investigation that exposed a critical safety violation: not enough insurance to protect its passengers.
It’s one of three governments closing in on North Texas’ largest cab company:
- The city of Dallas proposed new rules last week that would gut Yellow’s near-monopoly status.
- Federal investigators are questioning if Yellow violated the terms of an $82-million transportation contract.
- And now the state of Texas is formally rejecting all of Yellow’s excuses as to why it operated for years without adequate insurance coverage.
The state of Texas just sent a letter to the parent company of Yellow Cab accusing it of “non-compliance” with stringent insurance requirements, meant to protect passengers.
“If I represented the company, I’d be very concerned,” said Jeff Ansley, a former Assistant United States Attorney who is now a partner with Bell Nunnally in Dallas.
Yellow Cab controls an estimated 70 percent of the cabs in North Texas. In addition, every year Medicaid pays Irving Holdings (the parent company of Yellow Cab) to take Medicaid patients to their doctor’s appointments.
From 2009 to 2012, Irving and Yellow have collected more than $82 million in Medicaid money for these trips.
The contract is administered by the Texas Health and Human Services Commission. That agency has now concluded Irving Holdings & Yellow Cab did not have $750,000 in insurance coverage -- the amount required under the contract to pay damages to injured patients.
Patients like Maria Vazquez, who was killed during a Medicaid transport in 2012.
“If it’s a situation where you’ve got a contractual term to ensure - among other things, patient safety, patient health - if that term, in particular, is not being complied with, that increases the likelihood that the government would go after them,” Ansley said.
And while the state of Texas administers this Medicaid transportation program, the money itself comes from the federal government.
News 8 reported last week that the United States Attorney’s Office for the Eastern District of Texas is concurrently investigating Yellow for the same alleged violations.