Every third car in the city of Chicago seems to be a cab. While this might be an over-estimate, there is no doubt that it is very easy to catch a cab in the Windy City. However, when you get in a cab, keep in mind, that the cab driver is more of an independent contractor than he is an agent of the cab company who owns the vehicle. Pursuant to Section 9-112-080(b)(7) of the Chicago Municipal Code, taxis must be affiliated with a licensed affiliation. This affiliation requirement does not create an agency relationship as a matter of law between the taxi owner and the affiliation. Daniels v. Corrigan, 382 Ill. App. 3d 66, 75 (1st Dist. 2008).

            In Daniels, the court recognized the right to control the manner in which the work is done as the most important factor in determining the existence of an agency relationship. Id at 75. The court considered and rejected the argument that the City of Chicago Municipal Code definition of “affiliation”[1] supports a finding of agency. The Daniels court found, as a matter of law, that section 9-112-010 did not make the cab driver an agent of the cab affiliation.

            The Plaintiff in Daniels also argued that the cab affiliation’s requirement that its affiliates paint their cabs with its color and insignia, and that affiliates not place any advertising or markings on their vehicles that were not approved by the affiliation in its sole discretion were factors to be weighed in determining agency. The court disagreed, explaining that the cab affiliation was complying with its obligations under the Chicago Municipal Code. Further, the affiliations have a strong interest in protecting its colors and logo, and mere protection of a trade name does not create an agency relationship. Daniels at 79-80. The court concluded that the corporate defendants did not exercise the requisite control over the cab driver to establish an agency relationship. Id.

          Pursuant to Section 9-112-360(a) of the Chicago Municipal Code, taxis belonging to an affiliation must display that affiliation’s uniform color and scheme. Further, the Code requires that all taxicabs must have the physical medallion affixed to the hood of the taxi, which represents the physical license. See Section 9-112-279. According to the court in Daniels, the required uniform color and schemes on the exterior of the taxicab does not create an agency relationship.

            Similarly, Rule 3.04 for Taxi Medallion License holders states that all taxicabs licensed by the City of Chicago must be kept in a safe and undamaged condition. The Rule states that the interior of the vehicle shall be kept free from all waste paper, cans, garbage or any other item not intrinsic to the vehicle or to the conduct of operating a taxicab. The interior is also to be free from any material which a reasonable person would find noxious or unpleasant.

         All of these municipal regulations lead up to one specific court ruling, which frees cab companies from vicarious liability in accidents involving cabs. Absent an agency relationship between driver and owner, mere ownership of a vehicle involved in an accident is insufficient to hold the owner liable. Prewitt v. Hall, 113 Ill.App.3d 198, 252 N.E.2d 43 (1st Dist. 1969).  Also, Bell v. Reid,  was more direct saying:

In order for the owner of a motor vehicle to be held liable for the negligent operation of the vehicle by another, it must be shown that the relationship of principal and agent, or master and servant, existed between the owner and the driver at the time of the negligent operation.

118 Ill.App.3d 310, 73 Ill.Dec. 868, 454 N.E.2d 1117 ( 5th Dist. 1983).

        No agency relationship exists between cab companies and the taxi driver. As a result those cab companies owe no duty to persons injured in accidents involving the taxis they own and cannot be held liable under a theory of vicarious liability for mere ownership of the taxicab. 

[1] The City of Chicago Municipal Code defines a taxicab affiliation as “an association of licensees organized and incorporated for the purpose of providing its members with (1) a Chicago business address, (2) telephone number registered to the taxicab affiliation, (3) uniform color scheme, (4) trade name or emblem, (5) an approved two-way dispatch system, (6) insurance, (7) the designation of an authorized registered agent.” See Chicago Municipal Code 9-112-010.


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