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Taxi Cab Fraud in Boston?

Contact Attorney Jason Chan

Attorney Jason Chan

267 North Beacon Street, Suite 3
Boston MA 01235

Phone: 781-343-1DUI (781-343-1384)
Fax: 617-226-7986

Bostonians hopping into taxis to get from place to place have far larger concerns than getting there on time, according to an exclusive report the Boston Globe released this month. The great majority of cabs in the city, owned in large part by Boston Cab, is woefully underinsured and routinely leaves accident victims to their own devices in their medical bills.

Reforms Currently On Standby

The Globe reports that efforts to reform the current legal framework have mostly fallen to the wayside, though accident victims are working together to organize for reform.

The greatest problem with the current system is twofold: cab companies are permitted to purchase only a fraction of what a private citizen would have to in automobile insurance, and cab companies have fragmented themselves to oblivion so as to avoid paying premiums on insurance or being held legally liable in the event of an accident.

Taxi Insurance Minimums Much Lower Than Private Cars’

The article focuses mostly on Boston Cab’s enterprise, run by its owner Edward Tutunjian, as it is responsible for the largest number of cabs in Boston. According to the Globe, about 80% of taxis in Massachusetts have $20,000 worth of insurance on them, nowhere near enough for a major accident or personal injury lawsuit. The state legally requires only that much insurance on each vehicle, far less than the legally mandated minimum for private cars, though the Globe notes that statistics show taxis are about seven times more likely to have an accident than a regular car. This is also less insurance than that required on smaller vehicles like motorcycles. This is also significantly less than in other parts of the country for taxis. For example, New York City requires $100,000 on each commercial vehicle.

Boston Cab Avoiding Paying Premiums

While most of the aforementioned is publicly available, the exclusive report focuses on Tutunjian’s practice of self-insuring the cabs by depositing money in state accounts, rather than paying premiums. In addition, the cabs are franchised to their drivers in many instances, which places Boston Cab behind the corporate veil and prevents victims from successfully suing the greater corporate entity. Rather than suing Boston Cab, a victim is led to believe the responsible entity is a far smaller corporation or partnership which does not have the resources to pay beyond what their minimal insurance covers.

Despite Outrage, Not Illegal for Cabs to Avoid Premiums

This practice is not illegal, just as the small insurance rates are not. The article reports that, while many lawyers in the state have attempted to pierce the corporate veil and target Boston Cab directly, they have yet to be successful. Attempts to attract the attention of legislators and increase the mandatory insurance minimum to reasonable levels have also failed, with several victims telling the paper they feel neglected and ignored despite continuing to pressure their representatives to address the problem.

The Globe has published their exposé in three parts of several pages each, hopefully contributing to the attention the taxi issue has increasingly received from the legal community. Without legislative action, however, it is difficult to see a resolution to this situation, as these corporate and insurance practices are entirely within the realm of the law, leaving accident victims with little recourse outside of a sympathetic jury.

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