When Pacificab owner Steve Love heard one of his drivers had filed a claim for workers' compensation after an accident, he didn't think much of it.
Love believed cab drivers weren't covered by workers' comp thanks to an exemption in state law that prevents cabbies and 26 other types of workers (including golf caddies and newspaper carriers) from filing such claims. But his cabbie, Sherry Valadas, ended up winning an undisclosed amount plus $4,700 in attorney fees from SAIF Corp., the state-owned workers' comp insurer, for her claim in April 2005. The driver had suffered a strained pelvis in her accident after transporting a disabled passenger for TriMet.
And that's put Love, who owns Pacificab of Hillsboro, at the center of a statewide showdown between SAIF and cab companies across Oregon, who employ about 1,400 taxi drivers and chauffeurs.
The battle is over the state's current definition of a cab driver and whether someone driving a fare under a large umbrella contract—in this case, transporting disabled passengers for TriMet—can file a claim.
SAIF thinks cab companies should have to pay insurance premiums for such drivers because they aren't doing taxi work as defined by the sta te exemption: In the case of transporting disabled passengers, SAIF says the route is determined by the contract with TriMet, not the cab passenger. Other businesses that sign umbrella contracts with cab companies include Providence hospitals. And in Eugene, Oregon Taxi—also being chased by SAIF for premiums—contracts with the state to provide transportation for medical patients.
Since Love's cabbie won her claim, SAIF has sought premium payments averaging $5,610 a year for each driver from other cab companies. So far, SAIF's arguments have prevailed with the administrative law judges who decide disputes between SAIF and the companies it insures.
"It's not like we have targeted anybody," says SAIF spokesman Chris Davie. "We're just trying to make sure that we're collecting the premium that people ought to be paying for the exposure that they have."
Cab companies say those drivers are still exempted and that SAIF is equivocating over a technicality—who decides the route of a cab ride.
They say to make their businesses pay workers' comp premiums as if drivers were employees instead of independent contractors would require them to ask the local governments that regulate them to double fares.
"Even if I won right now, I think it'd put us out of business," said Tim O'Conner, owner of Milwaukie-based Sassy's Cab, which operates a small fleet of 17 cabs with 22 drivers.
Steve Entler, general manager of Portland-based Radio Cab, says the contract work that SAIF takes issue with is only about 10 percent of his company's business. But Entler's not waiting to see how the dispute plays out.
His company, which fields about 100,000 calls a month for 300-plus drivers, has lobbied to have a bill introduced in the Oregon Senate. The bill, SB 688, would broaden the workers' compensation exemption for cabbies to make clear that anyone who drives a cab for a living is not subject to workers' comp.
"As an employer, it concerns me," says Entler, who pays insurance premiums for his office staff of just under 50 people. "People should have medical coverage. Unfortunately, SAIF's form of protection is prohibitively expensive."
Davie says SAIF doesn't oppose the bill sought by Radio Cab, but it does want clearly defined rules to follow.
"We would like to have a nice, very clear, bright standard that everyone understands,'' Davie says. "But our experience in the past few years is, that standard is kind of muzzy."