Aug 27, 2014

What is a bailee driver?

Taxi drivers whose sole responsibility in the industry is to drive shifts using their Permit Holder's (formerly known as Operators) taxi are called 'bailee drivers'.

The term 'bailee' is derived from the word 'bailment' which is the legal term for the kind of arrangement between a driver and a Permit Holder for use of the taxi.  If a relationship exhibits certain characteristics, it will, according to law, be a bailment relationship (no matter how the parties or anyone else decides to describe it).  Those characteristics are as follows:

1.       the delivery of the exclusive right of possession by the bailor (Permit Holder);

2.       the voluntary assumption of possession by the bailee (driver);

3.       an assumption of the responsibility by the bailee (driver) to keep the goods (taxi) safe; and

4.       the obligation to return the thing bailed (the taxi).

The essence of bailment is that possession is transferred from the bailor and is voluntarily accepted by the bailee, but ownership is not.  This is clearly the case between a Permit Holder and a taxi driver.

Bailee Drivers are self-employed and are individual small businesses. They agree to terms with Permit Holders to take possession of and use a licensed taxi for a period of time and in exchange pay a percentage of the earnings, and at the end of that period of time return the taxi to the Permit Holder.  This agreement may be formalised in a written bailment agreement.  The nature of the bailment relationship has been tested in court several times and is a clearly understood legal structure under which taxi drivers and Permit Holder (Operators) work.

There has been some speculation in the industry of late about whether taxi drivers should still be referred to as 'bailee drivers'.  So is a taxi driver still a bailee driver? Yes.

The idea that as a result of recent reforms bailee drivers no longer exist is false.  There have been no changes in the recent reforms which affect the legal nature of the bailment relationship between drivers and Permit Holders (Operators).

The introduction of 'implied conditions' are, in practice, a set of minimum standards which apply to all taxi bailment relationships, whether the two parties have a written bailment agreement or not.

There have been some attempts in these implied conditions which demonstrate a desire by some to imply a level of control by Permit Holders over bailee drivers which does not exist.  For example, the requirement that Permit Holders grant drivers four weeks unpaid leave annually.  In reality, the Permit Holder has no authority to grant or deny leave to a bailee driver.  The driver is free to continue to drive or suspend driving for the Permit Holder at any time, for any period - both parties are independent business people.

Despite the fact the Taxi Services Commission have chosen to call their template agreement a 'driver agreement', the name of the document does not change the legal relationship between the parties. It is in the eyes of the law, still a bailment agreement.

The VTA will soon release a revised model bailment agreement, please email if you would like us to send you a copy when finalised.