NEWS 8 INVESTIGATES
DALLAS A News 8 investigation finds the City of Dallas has let Yellow Cab the region's largest taxi company operate without the required insurance coverage needed to process and pay the claims of injured passengers.
That failure, News 8 found, has let Yellow sometimes use hard-nosed tactics against injured people to avoid covering their medical costs.
On Sunday night, interim City Manager AC Gonzalez called an emergency meeting to address the problems raised by News 8. In a memo to the mayor and council, Gonzalez acknowledged that the problem may have been going on for 10 years. He said some cab companies are not in compliance, and must come into compliance within 30 days.
Mel Stockwell was injured in a taxi wreck last January. 'They've been threatening. They've been abusive,' he said about Yellow Cab.
A Freedom Cab, operated by the parent company of Yellow Cab, plowed through a red light and totaled Stockwell's car. Yellow's parent company, Irving Holdings, paid for the car.
But Stockwell also requested reimbursement for cab expenses he incurred after losing the use of his vehicle, and more importantly that Yellow pay his medical bills and lost wages, which he said total $48,000.
In frustration, Stockwell went to see Jeff Finkel, one of the owners and managers of Yellow Cab. Stockwell made this audio recording of Finkel saying:
'I tell you what. We made an offer. You can accept the offer, or get an attorney. But we are done, sir. We provided your car instantly. And you want us to pay for cabs also? You're being ludicrous. You have a good day. I need to ask you to leave my property.'
That didn't sound fair to Stockwell. He shared his audio recording with the city six months ago and has gotten no response.
'I feel totally run over,' Stockwell said.
In Dallas, cab companies are required to carry $500,000 worth of insurance. Every dollar of an injury claim must be paid through an insurance policy not directly by the cab company. Self-insurance is not permitted.
The rule is supposed to eliminate the temptation for a cab company to save its cash by denying legitimate injury claims.
But unlike every other licensed cab company in the city, records obtained by News 8 show Yellow is self-insured up to $250,000.
This effectively turns Yellow from a cab company into its own insurance company.
That is not allowed.
The city's new memo from Gonzalez indicates it may be a typo from 10 years ago that made it appear Yellow did not need to comply with insurance requirements. The memo also notes that some city staff questioned what was going on, but those questions went nowhere.
An attorney for Yellow told News 8 that it is compliance with the ordinance, and that it is allowed to self-insure. The company says it uses a third-party claims administrator to address the claims of injured passengers.
Diana Lambert, a Yellow Cab passenger, was injured in a wreck in 2011.
'I thought we were going to die when the cab spun out of control,' she said.
Lambert added she can no longer work after breaking bones in her back and tearing muscles in her neck. When her attorney, Mark Frenkel, sued to recover damages, he learned, in a letter from Yellow that 'There is no 'primary policy,' and the cab company is self-retained/self-insured for the first $250K.'
In a court filing Yellow then told him they were not responsible anyway that the accident was the fault of the cab driver, who is an independent contractor.
'I don't think your average cab driver is walking around with $250,000 in cash to pay judgments,' Frenkel said.
Six months ago, Frenkel sent a certified letter to the Dallas City Attorney to alert them that Yellow did not have the required $500,000 policy. The city never responded.
Last month, the city's own investigation showed Yellow Cab was behind the writing of new regulations to allegedly keep Uber a competitor out of the market.
With this new memo, the city is responding, saying it will develop any 'process changes and additional enforcement actions' to make sure the rules are followed.