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San Francisco's Yellow Cab Files For Bankruptcy (cnn.com)
Applehu Akbar writes: Yellow Cab Cooperative, the largest taxi company in San Francisco, has filed Chapter 11. While competition from those newfangled ride-sharing services is a natural target for blame, a more proximate cause is Yellow Cab losing an $8 million accident liability suit by a passenger who is now paralyzed. Apparently the Yellow Cab drivers are...registered as independent contractors. So much for the medallion cab argument that they offer superior liability coverage.
We don't want to actually, you know, read the story anyways. We'd rather bitch about Uber or Taxis in general with no actual facts to back it up.
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Like this one?
If it weren't for deadlines, nothing would be late.
To be fair, they did cover it.
Maybe they need bankruptcy insurance :-)
The lesson is that ANY cab-like co better be ready for an 8-mil zinger.
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They're still independent contractors which means it is the contractors' responsibility to register whatever they need to register. I am an independent contractor for some companies, I collect sales tax and have to report/pay income taxes, social security etc, I am responsible for my insurance and the locality's business licenses.
I could easily go ahead and collect a number of pay checks without ever reporting them as business income, ask people to pay cash or whatever but I would be responsible if the tax man or insurance man cometh.
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was that their biggest creditor was because they couldn't weasel out of paying for a terrible wreak caused by one of their drivers. $8 mil of their $20 mil in debt is for that. I wonder if this is just the first step in folding the company and reforming it so they can skip out on paying the poor gal who got hit. This is why folks in the know hate Uber. It's all about externalizing your costs onto somebody else.Uber's doing the same damn thing but "with an App" so it's OK.
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Did you not read the article? The Yellow Taxi company operates as a co-operative and argued that the driver was an independent contractor, just like Uber does. Apparently this position did not fly with the court, and it seems reasonable that if Uber made the same argument, the court would also make Uber liable.
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San Fran is full of faggots...
If only that were true -- at least San Francisco was interesting when it was a gay mecca and center of the gay pride movement and people of all races, sexual orientation and income could live there. Now it's just full of boring well paid, mostly male and white techies, which pushes out all of the old interesting businesses in favor of bars and restaurants that cater to these newcomers that serve things like $20 locally grown hand-raised artisanal organic martinis with an olive on the side flown in daily from Venus.
That is what being an independent contractor means for you.
The reason that Truck Companies, Taxi Companies, some Chicken Farmers are "independent contractors" is to push risk and cost out of the corporation and onto the I/C. And the profit stays with the corporation, it does not follow the risk or cost very well.
With Truck Companies, they dont have to carry the insurance, dont have to worry as much about fluctuations in the cost of diesel, Truck Maintenance, etc.
I recall a news article about how some Truckers were loosing money on loads because diesel costs went up fast,and the corporation the drivers were dealing with just didn't care, "the loads were sold, if you want to continue dealing with us, take it"
I also recall an article about one of the big Chicken sellers, they would have farms, the next group of gullible "we will make millions" people would buy the farm, because the "per chicken" payment was good. And maybe for a while, it would be. But then, they would lower the "per chicken" amount. Again and again, until those owners where soaked and gave up.
I understand that Home Depot will progressively lower the amount they are willing to pay their suppliers year over year, until the supplier goes under or gets smart and stops dealing with them.
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TL/DR version: Super old news; done for debt shedding.
This was publicly announced 3 weeks ago, but it's been known for a month and a half (since 10 Dec 2015), when a letter was sent out to co-op members, and it was primarily done to shed debt, and because the coop (which is how it's organized) is not attracting new drivers; with a limited number of medallions, taxi coops compete to attract those with medallions. Yellow cab isn't doing as well in this as other companies and co-ops. Primarily they are losing medallioned drivers to Flywheel Taxi (formerly, DeSoto Cab) and Luxor Cab.
"The bankruptcy filing will allow the co-op to shed its mounting debts."
"Fewer drivers mean fewer profits for Yellow Cab, the co-op admitted in a letter to its members."
"The company told the San Francisco Examiner its ridership numbers are healthy. But in a letter to shareholders obtained by the Examiner, Yellow Cab Co-Op President Pamela Martinez wrote that they must do more with less to survive."
^^^^---- note: not losing business to ride sharing services ----^^^^
“In reality, we have the best color scheme there is in the world, we’ve got a lot of loyal customers, we still get a high volume of calls to our color scheme on a daily basis,” he [Jim Gillespie] said.
"Financially, he said the straw that broke the camel’s back were a number of lawsuits which ended up hurting the company’s bottom line."
"On background, multiple sources told the Examiner that cab companies are having a tough time hiring competent drivers and may be hiring drivers with spotty driving records. Gillespie denied this, but he did say the lawsuits were harmful to the co-op."
http://www.sfexaminer.com/yell...
It took a court to break the company's argument that since it's drivers were independent contractors, the company itself shouldn't be found liable.
Indeed, I think there's a misconception on what liability coverage is, and how liability insurance works.
You see, any liability insurance police is limited by a maximum payout - For example, a common one is $100k per person, $300k per incident coverage, my 'step up' from that which is $250k per person/$500k per incident. This is generally enough to cover most claims. But liability itself doesn't have a limit unless a statute(law) has been passed limiting it.
So the taxi driver gets into an accident and causes $8M of damage. Must of been nasty. But he's carrying the minimum insurance. $100k is paid to the harmed individual via the insurance. Obviously this is 'no where near enough'. So the harmed party would go after the rest of the cab driver's assets. Problem: Most people in the USA are effectively 'judgement proof' because their debts exceed their assets, and as a matter of law, their home, primary vehicle, and such are generally untouchable*. Most cab driver's aren't rich enough to have a spare yacht that can be sold. So lawyer and court fees would quickly drive the driver bankrupt. You can't get money from a stone.
So in this case they then go after the parent company - Yellow Cab. It does it's best to argue that it's not liable. Hell, it doesn't have insurance for this. Thus, when the verdict is handed down, they're 'forced' to file for bankruptcy, if one of the more minor versions of it.
When people mention 'liability coverage', they generally mean insurance, which this isn't. This is straight up liability.
*They can force the sale of extra vehicles, if not used for work. But for something like a primary residence, if the judge determines that selling the residence/vehicle and buying a more modest version won't actually yield a significant amount of money, they won't do so. Figure on losing 20-40% of the value of the property in question, and suddenly while there might be 'modest' gains to be had, kicking a taxi driver out of a $200k lousy home and forcing him into an apartment would actually COST money. You're not getting much selling a $10k car to the dealer only to buy an $8k car.
I don't read AC A human right
Many years ago, My dad worked for a company that had a customer that was about 95% of their business. They dropped that customer, because they were not making enough money on it.
Took them a few years to crawl back, but they managed and became a leader in their range, making a LOT more money. Afterwards it was the best decision they made, but it was by no means an easy one. Could have gone wrong and they would have been closed.
The lesson here: diversify.
Don't fight for your country, if your country does not fight for you.