SAN FRANCISCO—The Yellow Cab Cooperation is San Francisco’s largest taxi company, with over 500 fleets in operation, and about 530 medallion holders recently announced that it is considering filing for Chapter 11 bankruptcy.
According to Yellow Cab General Manager Jim Gillespie, several factors have contributed to the company’s decision. “We have had an unusual number of accident claims recently that have forced us to consider this option. If the filing is necessary, we expect to be in a stronger position than before the filing.”
In 2011, a Yellow Cab driver allegedly failed to recognize heavy traffic as it was approaching the freeway. The incident resulted in a crash with a passenger onboard and held the taxi co-op liable for crashing into a stopped car while driving between 60 to 65 mph. The passenger, Ida Fua, 28, was severely injured. On June 28, 2015, Fua was awarded $8 million for injuries she sustained which included brain injury and partial paralysis as a result of the crash. Though the accident was entirely at the fault of the driver, Joel Enrique Andino Sanchez, the jury found Yellow Cab liable due to the fact that the driver was an independent contractor and recognized as an “ostensible employee,” according to attorney Todd Emanuel.
Another factor involved the increased use of tech upstarts Uber and Lyft, both of whom are headquartered in San Francisco and charge substantially lower rates than taxi companies due its convenience and fewer restrictions for employees to be hired.
As a result of the increased use of rideshare apps and debts caused by lawsuit filings, the company believes they will be able avoid complete closure and relieved of its debt if they file for bankruptcy now. According to Yellow Cab Co-Op Resident Pamela Martinez, the company will be filing for bankruptcy later this month.