• Rise of the Car Sharing Programs: Recommendations for an Expanding Industry
  • November 14, 2016 | Author: James E. Kimmel
  • Law Firm: Abrams, Gorelick, Friedman & Jacobson, LLP - New York Office
  • With millennials and others young at heart leading the way, ride sharing programs have become a 21st century success story. With Zipcar, now a subsidiary of Avis Budget Group, starting the movement in the early 2000s, other major players such as Hertz Corp., Enterprise Holdings and Daimler AG have made forays into the industry. Looking out my front window in Brooklyn, Zipcars driving down the block and the blue and white Car2Go Smart Cars parked on the street have become a part of the urban landscape. The same holds true for many urban centers. Ride sharing companies appear poised to grow as the practice becomes more and more a part of city living.

    Inevitably, with the influx of vehicles and drivers on the roads, accident claims will arise and Zipcar, Car2Go, Enterprise CarShare and others have and will continue to find themselves named as defendants in lawsuits. This is particularly true in New York where statutes exist that impose vicarious liability for bodily injuries sustained by other drivers or occupants of other vehicles on the owners, renters, and lessors of motor vehicles without regard to any actual contributory negligence or other fault attributable to the car sharing (or rental car) company.

    The bad news is that, in New York, this vicarious liability poses an additional obligation on the car sharing or rental car companies to retain independent counsel for both the driver and the company. New York Courts have held that the conflict inherent in representing both the operator of the vehicle and the rental company require that separate counsel be hired to defend the case.

    The good news is that this task is not as onerous or costly as it may seem. The federal government recognized and took steps to lessen the burdens posed by vicarious liability statutes like New York's in enacting the "Graves Amendment" in 2005 [see, 49 U.S.C. section 30106 - Rented or leased motor vehicle safety and responsibility]. In a partnership with Zipcar and its insurer prior to Avis' acquisition, Abrams, Gorelick, Friedman & Jacobson developed a program to expediently obtain dismissals for Zipcar, either by way of a voluntary discontinuance or via an early summary judgment motion, based on the protections afforded by the Graves Amendment. AGF&J utilized this program to extricate Zipcar from litigation premised on the absence of any independent negligence attributable to Zipcar in the early stages of the litigation and often before significant discovery related expenses were incurred.

    AGF&J's experience in this regard is also applicable to the traditional rental car companies and their subsidiaries in addition to their newer cousins, the car sharing companies.