Privileged rides are still common carriers

Recent changes in the law across the United States seem to have expanded the categorical definition of who is a common carrier subject to a heightened duty of care to its passengers. The state of Maryland recently ordered Uber Technologies, a company that links people seeking rides with freelance drivers, to apply for a motor carrier permit saying it is a common carrier subject to state regulations. Uber is appealing this decision. Other states, including California, seem to be following the same trend. Assembly Bill 2239, which passed a state Senate committee, would make ride-share companies such as Uber or Lyft provide insurance coverage to cover drivers from the minute they flip on their app to pick up passengers. Taxi companies, which are viewed as common carriers, argue these upstarts need more stringent regulation. To that end, the California Public Utilities Commission is now researching ways to regulate ridesharing in California.

Although the trend seems to be expanding the scope of who is a common carrier, and thereby increasing the duty of care owed to the general public, ridesharing and private limousine companies continue to fight an uphill battle claiming they are "for-hire" private transportation subject to only ordinary duty of care. What this means is that unlike taxis, buses, planes and other forms of transportation, those companies are essentially exempted from acting affirmatively to prevent accidents and avoid placing their passengers in harm's way.

Under California law, a common carrier is a person or entity that is hired to take people or goods from place to place for a set price. A common carrier creates a special relationship with its passengers and must use "utmost care and diligence" to ensure passengers' safety. California Civil Code Section 2100. By the nature of that special relationship, common carriers have a higher duty of care to safely deliver passengers to their destination, and may be liable for failing to act affirmatively to prevent harm. In contrast, under ordinary care, a person is not liable unless he or she is actively careless.

Unfortunately, this distinction between who fits into the category of a common carrier and one subject only to ordinary care is frequently misunderstood by the general public. As a result, common carriers are often "given a free pass" and not subjected to the higher legal standard. But should limousine and ridesharing companies be one day defined as common carriers under the law, they would have a much more significant exposure to liability if their drivers do not exercise the utmost diligence to safely deliver their passengers.

Common carriers hold themselves out to the public generally and indifferently to carry goods or persons from place to place for profit. Squaw Valley Ski Corporation v. Superior Court, 2 Cal. App. 4th 1499, 1508 (1992). "Public" does not, however, mean they must take everyone all the time. Instead, courts look at a number of factors in determining common carrier status including whether the carrier maintains a regular place of business for the purpose of transporting passengers, whether it advertises to the general public that it provides transportation services, and whether standard fees are charged for the services of carrying people or goods. A carrier can be a common carrier even if it does not have a regular schedule of departures, a fixed route, or a transportation license. The entity merely needs to be of the character that members of the general public may choose as a service for means of transportation.

Examples of entities that have been held to fall within the category of a common carriers include stagecoaches, buses, automobiles, cabs, carts, wagons, sleds, elevators, roller coasters, mule trains, taxi cabs, airplanes, trains and even ski lifts. Limousine companies, to date, however, have been somewhat of a unique ambiguity as there is no current case authority or legislative direction indicating how they are to be categorized. But it appears ultimately they may be defined as common carriers given the recent changes in the law across the country.

Private carriers for hire, which are not liable unless actively careless, make no public profession that they will carry everyone who applies. Instead, a private carrier operates only for the benefit of a particular class and not for the benefit of the public generally. For example, where a school district contracts with a taxi company to transport disabled children to school each day on a set schedule for a set price under a written contract, and forego being available to serve the general public during that time period, they are viewed as private carriers. When they are not serving that class, the taxis would be common carriers and held to the heightened standard of care.

The distinction between common carriers and private carriers is critical because common carriers must not only act with reasonable care, but have a heightened duty to take affirmative measures to avoid placing their passengers in harm's way. Common carriers are required to do all that human care, vigilance and foresight reasonably can do under all the circumstances to avoid an accident. This elevated standard of care is based upon the recognition that serving the public entails greater responsibility toward customers.

In recent years, presumed "private transportation" has been increasingly available to the general public. Companies such as Uber allow customers to summon town car limousines with a cellphone and credit card. In fact, Uber gives customers the option of selecting taxis, regular sedans and even SUVs at a set rate. The same can be true of private jets - with fractional ownership and chartered companies, customers are able to fly in a noncommercial private aircraft without having to deal with actual jet ownership.

Despite the privilege of riding in a town car limousine or chartered jet, both are still services that are advertised to the general public for transportation at a fixed price, and squarely fit within the definition of a common carrier requiring a heightened duty of care to their passengers. Simply paying more for transportation service does not destroy the inherent nature of that duty to carry passengers under a heightened standard of care. Town car limousines, though slightly more expensive than taxis, do not automatically become private hires simply because they are a more intimate mode of transportation. If a town car service advertises publicly and accepts a fixed fare, even if greater than a taxi, it should be held to the same heightened standard of care. It is not a leap to expect a professional driver who is paid to drive a passenger to go above and beyond the call of duty to not place passengers in harm's way.

The importance of defining transportation companies as common carriers means that steps have been taken to make sure the drivers exercise the utmost care and diligence. Professional drivers, such as limousine operators, are expected to drive skillfully and competently. There is an expectation they would have also received formal training and have a clear understanding of defensive driving.

Not every accident is avoidable. However, common carriers by the nature of their business, their service to the public, and the money they receive as professional operators, are expected to do everything in their power to prevent an accident. Limousine carriers should be no exception. The heightened standard of care is imposed because they undertake, through a special relationship, to transport "precious cargo" to safety. Given the recent evolution of laws in the U.S., it will not be a surprise to see companies such as Uber, Lyft and other limousine companies, being held to stricter standards.