Uber Sued By Parents of Six-Year-Old Killed On New Year's Eve
BY Sarah Lai Stirland | Monday, January 27 2014
At 10 am in San Francisco last Thursday, local community members gathered to attend a funeral service for someone who should have had years ahead of her: six-year-old Sofia Liu. The elementary school student died after a car ran into her family as they crossed a road together on New Year’s Eve.
The local tragedy registered as a blip on the national radar news screen because it involved the white hot urban transportation provider Uber, which with its $361. 2 million in venture capital funding late last summer, is poised to transform urban transportation as we currently know it. Its flagship service is a mobile on-demand limo service that enables commercially insured town cars to find nearby hails with the app. It also operates UberX, a lower-cost peer-to-peer ride-sharing service in 24 cities and states in the United States. UberX is one of several mobile services that connects drivers with their own cars to people who need to get around town, sets and processes payments, and takes a 20 percent cut of the transactions.
The insurance status of this arrangement isn’t as clear-cut, and the New Year’s Eve accident brings back into sharp focus the still fuzzy question of who should be held financially liable when there’s no designated central company entrusted with all the traditional legal and financial obligations of a commercial taxi service.
Update: As I report below, trial attorney Christopher Dolan has taken on the case. The family filed suit against Uber Monday. The law firm says that it's the first wrongful death lawsuit against Uber. The suit says Uber is responsible for the death because the driver was using the app to find rides at the time.
Don’t Look At Me
At the time of the accident, Sofia’s mother Huan Kuang told local news outlets that she believed that Uber was responsible for her daughter’s death. But Uber has effectively denied culpability, stating that the driver in question wasn’t ferrying passengers around at the time. Rules established by the California Public Utility Commission last September stipulate that “transportation network providers” such as Uber, Lyft and Sidecar are only obligated to insure Uber drivers for liabilities for up to a million dollars-per incident if they’re carrying passengers. Meanwhile, insurance companies and their associations say that insurance provided to individuals using their cars for their personal use do not cover claims resulting from incidents involving commercial ride-sharing apps such as Lyft and Uber.
Leaders in the taxicab industry note that regular taxicab drivers are obligated to pay for commercial insurance that covers their excess liabilities at all times.
“There is no insurance coverage, and they’re basically relying on the drivers not informing their insurance companies of what they’re doing,” said Barry Korengold, president of the San Francisco Cab Drivers Association. The association is engaged in several regulatory and legal battles against the ride-sharing services.
“Since the CPUC came out with the decision in September, they’re requiring primary insurance only when they’re on a call,” Korengold explained. “The problem with that is if they’re on the streets looking for a fare, they’re effectively on duty.”
In this case, Syed Muzaffar, the driver in question, is an unemployed information technology professional who was effectively moonlighting as a cab driver in San Francisco using the UberX mobile app so that he could support his four children and school teacher wife.
Kara Cross, general counsel for the Personal Insurance Federation of California, an industry trade group for State Farm, Farmers’, Progressive, Allstate, Liberty Mutual and Mercury, said in an interview that drivers can always buy commercial policies.
“There’s commercial coverage out there that’s available,” she said. “It’s just a matter of those individuals working for these companies getting coverage. It does cost more, and I think that’s why you’ll find that not everybody is doing that.”
On the part of the insurance companies, “there are just concerns out there, because there are not clear lines on how everything will work,” she added.
Robin Chase, co-founder and former CEO of car-sharing service ZipCar, and currently the CEO of Buzzcar, a peer-to-peer car rental service, disputes the idea that Uber should be liable for the Liu accident.
“While incredibly tragic, I think this is a real stretch to blame Uber,” she said in an e-mail. “I'm sure that her lawyer has told her to do it, and our terrible health insurance system is also likely to force her to do this.”
It’s All Really Great … Until You Lose A Leg
In Liu’s case, her funeral service was only made possible because of the local community’s online donations, who together raised more than $34,000 for Sofia’s family, who are on public assistance, according to Janet Kunze, the organizer of the campaign. Kunze has a son who was a classmate of Sofia’s, and a daughter who is a classmate of Sofia's brother Anthony, a kindergartner who was also injured in the accident.
Liu and her family were walking in the Tenderloin district when Muzaffar ran into them as he made a right turn on a green light. The 57-year-old was cruising around the neighborhood waiting for hails to come through on the app, according to his attorney Graham Archer.
Muzzafar “was properly licensed and insured,” Archer maintains, although he declined to specify what kind of insurance Muzzafar carried, other than to say a civil lawsuit had been filed (implying that the insurance company involved had declined any claim made against it.)
Uber has also denied any responsibility in another case that appears more well-defined. Six days after the CPUC came out with its ruling (the premise of which Uber is disputing) an UberX driver ran a red light and collided with another car. Both of the passengers, who were taking the UberX from the Mission to the Marina, suffered from concussions and bruises. One was knocked unconscious and rushed off to hospital, according to the court filing. Despite the CPUC’s ruling that TNCs need to offer the $1 million-per-incident commercial insurance policy while carrying passengers, Uber told the passengers to file a claim with the driver’s insurance company. The company denied the claim on the basis that the driver had bought a personal insurance policy, not a commercial one.
The lawsuit charges that Uber is responsible for the two passengers’ medical costs, property damage, loss of wages and earning capacity because it was Uber that arranged the ride, and managed the billing.
“Uber is telling these individuals to make a claim on their personal insurance, which is turning the whole personal injury insurance scheme upside down,” said the passengers’ lawyer Philip Segal in an interview. Segal has been working as a defense lawyer for the insurance industry for 24 years. “The public doesn’t know that. They think it’s great – until there’s an accident and they lose their leg, and then they wonder why they’re not being compensated.”
(Segal’s firm Kern, Noda, Devine & Segal represents taxicab companies. He noted the irony that taxicab companies themselves have historically tried Uber’s approach in treating drivers as independent contractors in order to lower their costs. A series of court decisions in California determined that for all intents and purposes, cab drivers are effectively employees and thus entitled to workers compensation and full commercial insurance coverage from the cab companies.)
Neither Uber’s CEO Travis Kalanick nor spokesperson Andrew Noyes responded for a request for comment on the case, and the company has yet to respond to the lawsuit.
These accidents might seem like small potatoes in the multi-million dollar business scheme that has expanded exponentially around the globe in the past year. But many drivers, as well as policymakers, are watching the developments closely: California was the first state to enact rules to govern ride-sharing last September. The CPUC did so in an environment where the populist political winds favored the TNCs, and still do. A glance at the petition site Change.org, for example, shows that thousands of people all over the country support Uber’s ongoing campaign to dislodge the often inefficient and heavily-regulated local taxi industries in their municipalities.
The commission is scheduled to revisit its ruling sometime this year, said Andrew Kotch, one of its information officers.
“Going forward, we will ensure that the overarching goals of public safety, equity, and innovation are being achieved,” he wrote in an e-mail responding to a query. “We will have a public process in the next year to consider the performance of this new mode of transportation and accompanying regulations.”
The workshops will presumably examine the numerous reports that the commission has ordered the TNCs to return to them by mid September. They must disclose their plans to provide apps and vehicles that can accommodate disabled passengers, service area trends via zip code, problems with drivers, driver training procedures, and the miles and hours drivers logged in the year since the regulations went into effect
To get an (imperfect) sense of the scale of the issue in one city: the SFCDA’s Korengold notes that his association has counted 3,000 different license plates of cars engaged in commercial ride-sharing services over the course of the last couple of years. That’s three times the number of licensed cabs in the San Francisco. And on the national and international levels, the demand for such services don’t appear to be abating: Uber’s CEO Travis Kalanick told the Wall Street Journal earlier this month that his company may hire up to 1,000 people. In the United States alone, the company operates in 31 municipal areas. Globally, it’ already operating in 26 countries. And there are dozens of other services like it sprouting up all over the globe.
Meanwhile, back in San Francisco the Liu case has the potential to gain even more traction on the national radar screen as a colorful trial attorney who’s a vocal critic of the TNCs considers taking on the case. Todd Emanuel, a local personal injury lawyer in San Francisco who had initially been in talks with Liu’s parents for representation, told me Wednesday that Liu’s father had retained Christopher Dolan. (Dolan did not return phone calls and an e-mail to confirm that.)
Dolan was in the headlines, and on CNN’s Piers Morgan show most recently as the attorney for the parents of Jahi McMath, the 13-year-old from Oakland, California who died in hospital after complications resulted from a routine operation to try to relieve her of sleep apnea. Although the doctors had declared her effectively brain dead, McMath’s parents refused to let them take her off of life support. Beyond that, the California Daily Journal, a widely-read legal publication, has identified Dolan as one of California’s top 100 lawyers.
In a column in the San Francisco Examiner last summer, he compared a ride with the ride-sharing services to having unprotected sex.
"In my opinion, this is a ride that no one should ever take. Riding in one of these cars is much like having unprotected sex — while it may seem like fun at the time, it is very, very risky and you give up a host of your legal rights for the convenience and pseudo-cool factor of ridesharing."