One of the key questions that has emerged in the debate following the council’s approval of the Zipcar is whether the city is liable if a Zipcar driver is involved in a serious accident, causing great bodily harm or death.
City Attorney Harriet Steiner told the Vanguard on Monday that not only is the city not liable in case of an accident by a user, the city will be taking additional steps to alleviate public misperception of the issue by next month removing key provisions in the contract that appeared to convey liability to the city for the operation of Zipcars by employees.
At the next meeting, Sue Greenwald became concerned about liability issues and pushed to reconsider the item, but she fell one vote short of getting a reconsideration.
Wrote Bob Dunning, the venerable Davis Enterprise columnist, on September 12, “The city is not likely to escape liability when and if a Zipcar driver is involved in a serious accident causing great bodily harm or death.”
He continues, “The folks at Zipcar certainly think that’s the case or they wouldn’t have demanded the contract state that the “City will maintain Commercial General Liability insurance with a combined single limit of not less than $1,000,000, will have Zipcar named as an additional insured under such policy and will provide Zipcar with a certificate evidencing such insurance.””
But Mr. Dunning never checked with the city on the question of liability, he simply read from the contract the line about liability and made the assumption that this meant that the city would be liable if a driver were involved in a serious accident.
However, from the start, the city insisted that was not the case, that Zipcar itself carried insurance that covered the individual driver.
Indeed, in the contract, Zipcar was said to maintain the following insurance in Schedule C section 3 of the contract, “During the term of this Agreement, Zipcar will maintain the following insurance: (a) Commercial Automobile Liability in the amount of $1,000,000 combined single limit (CSL), with Personal Injury Protection (PIP) and Uninsured (UI) and Underinsured Motorist (UIM) coverage at state minimum limits; (b) Commercial General Liability in the amount of $1,000,000 each occurrence, general aggregate and products and completed operations aggregate; and (c) Commercial Excess in an amount of $1,000,000 each occurrence and annual aggregate. Zipcar will add City as a designated insured on Zipcar’s Commercial Automobile Liability policy and as an additional insured on Zipcar’s Commercial General Liability Insurance policy. Eligible Persons are insured as described in the Member Agreement. At City’s request, Zipcar will provide City with a certificate of insurance evidencing such coverage.”
However, in Schedule B under “City Obligations” it says, “City will maintain Commercial General Liability insurance with a combined single limit of not less than $1,000,000, will have Zipcar named as an additional insured under such policy and will provide Zipcar with a certificate evidencing such insurance. City will notify Zipcar not less than thirty (30) days in advance of any cancellation of such policy. City will also carry any required Worker’s Compensation, Disability or other insurance on behalf of its employees providing maintenance services to Zipcar hereunder. Any City employee transporting vehicles for maintenance services must apply for membership and be approved by Zipcar prior to operating any Zipcar Vehicle; provided, however, that with respect to the foregoing, Zipcar shall not charge the City or employee any membership fee.”
So it would appear that Zipcar and the individual are covered separate from the city, but why is the city needing to be designated on the insurance? More to the point, is the city liable should a Zipcar driver have an accident?
The answer appears to be no. The Schedule B obligations would appear to relate to city employees. Or do they?
The Vanguard spoke with City Attorney Harriet Steiner, who clarified the city’s obligations.
City Attorney Steiner told the Vanguard, “The Zipcar Agreement has two different insurance and indemnity provisions.”
“The first,” she said, “is on Schedule C paragraph 3 and it provides that Zip Car will maintain insurance and name the city as a designated insured and additional insured under Zipcar’s insurance policies. This provision applies to the use of Zipcars by customers of Zipcar.”
The second provision, as we suspected, puts the city as the active party due to the fact that city employees are using the vehicle.
“The second provision is Schedule B, paragraph 3 and relates to times when the City staff is transporting a Zipcar for maintenance,” she told the Vanguard.
“Here, the City is the active party (since the City employee is driving the car for the purpose of taking it for service),” she continued.
She concluded, “Under this provision, the city employee is still entitled to the same insurance benefits as any other Zipcar driver, but the City agreed to provide insurance in addition to the general insurance.”
According to Ms. Steiner, the city and Zipcar have now agreed to delelete Schedule B, paragraph 3 entirely.
She reports, “This amendment to the Zipcar agreement will go to the City Council next month for approval.”
Instead she said, “Zipcar has hired its own employee to transport the cars for maintenance so that the city will not have any active role in this contract (other than providing the parking spaces). Zipcar’s obligation to transport its cars for service shall be included in the contract.”
There are several lessons that can be learned from this ordeal. The liability issue was a legitimate concern, and the language was somewhat ambiguous as to under what circumstances the city could be liable.
However, it never appeared that the city would be liable should a Zipcar driver get into an accident. These changes will clarify that language and remove that issue, at least from the public concerns.
The bigger issue is a procedural one, and this is a lesson that the entire council needs to learn. We all get frustrated at the length of time issues take to be resolved before the Davis City Council, however the deliberative process is very important.
When complex items are rammed through without much discussion, key points are missed. Mistakes that might be caught are glossed over. Democracy is not always the prettiest form of government, but it tends to be the best, in that debate forces us to consider the strengths and weaknesses of our own position.
We need a council that is able to debate and deliberate over key issues to catch these kinds of mistakes, or at least clarify the record, on the record.
Of course, these changes do not address the broader debate over whether this contract represents the city subsidizing competition for existing rental agencies, whether the city is going to have to pay up to $74,000 per year out of development impact fees to Zipcar, and whether this is a worthwhile program. However, at least the record is clarified on one key point of controversy.
—David M. Greenwald reporting
Since it is coming back to CC, is it possible to rescind the whole thing ir at least have public comment? Possible to extend the UCD contract to one car downtown?
I don’t think so, because the time has passed to rescind the vote, there is an opt-out clause at some point, and even if they could rescind it, it wouldn’t be noticed to do anything more than modify the liability.
[quote]it never appeared that the city would be liable should a Zipcar driver get into an accident[/quote]
My biggest concern was that the City was required to maintain the vehicle which potentially opens us to liability. It looks like this issue has been addressed if zipcar now must use one of its own employees.
However its not clear to me that the liability issue is completely closed. Suppose someone rents a car from zipcar, notices something is wrong with the car (say the brakes don’t work properly)
Who they report this problem to? Normally one would report it directly to the rental car company, but zipcar’s business plan, which is designed to make it easy to rent, also appears to lack some of the checks that a standard rental car procedure has put in place.
What if the renter reports the problem to the City (through an official employed by the City) which is a party to this contract, and then the City fails to tell zipcar? I am sure there are other scenarios one could spin out were the City might be liable–at a minimum the City might find it expedient to settle out of court if it were sued.
Dunning was right to point out that it was interesting that the City had to maintain insurance. His column and this blog seems to have focused attention on the issue.
I agree with David that this brings up a number of issues, though I’d put it in a bit different fashion:
1. Where was our City Attorney in all this? (Moving her office?) Its her job to catch this and she didn’t. If she cannot do her job she should be fired. Since she is not a City employee it should be easier.
2. Where was City staff in all of this? They appear to have a cozy relationship with zipcar. This is a common problem with all City staffs where they spend time with folks and develop a relationship with the zipcar marketing people. But our staff is well-paid to look out for OUR interests, not zipcars.
3. I agree that the CC needs to have ample time to address these issues, but I’d also add that the zipcar contract is a tertiary issue (like reverse angle parking and wood burning–maybe we could argue and say that wood burning is a secondary issue but its still not as important as the budget and econ development).
Our CC should focus on the important issues and send back issues like zipcar to our well-paid staff and our well-paid attorney. There is no rush on zip-car. It can be tabled for another meeting so staff can do its job properly. Indeed it could be tabled forever. Our CC’s time is valuable and scarce and it should focus on IMPORTANT issues.
4. CC members should be willing to say “I made a mistake” or at least “I changed my mind after more careful consideration.” Sue dug into the issue in more detail and realized there was an issue. I believe Rochelle also was willing to say she had changed her mind, though her reasoning was different.
Above all I want our CC to focus on important issues–budget and economic development/land use issues. The smaller stuff can wait. If they don’t have time they can table till later. I agree CC should not be pressured to sign off on a half-baked deal.
Agree with Dr Wu. Again why couldn’t UCDs contract be expanded for 1-2 cars downtown? If it is so successful would think that would be a good solution to the mess.
Doesn’t this bring up the ‘why no RFP for city attny services’ issue which we discussed earlier?
If we can have an RFP (or 2) for banking, it would seem important to compare attny services/cost/quality.
I am willing to wait for the big ideas. I would rather the CC be more deliberate than take premature, poorly thought-out decisions. Take your time!
dmg: “According to Ms. Steiner, the city and Zipcar have now agreed to delelete Schedule B, paragraph 3 entirely. She reports, “This amendment to the Zipcar agreement will go to the City Council next month for approval.” Instead she said, “Zipcar has hired its own employee to transport the cars for maintenance so that the city will not have any active role in this contract (other than providing the parking spaces). Zipcar’s obligation to transport its cars for service shall be included in the contract.””
If the contract is being changed after the fact, it is very likely that the spin being put on this whole fiasco is misleading at best – that somehow the city wasn’t on the hook for liability. If that were true, why change the contract? And why has Zipcar now suddenly agreed to have its own employees take the Zipcars in for maintenance? Make no mistake, the contract was “renegotiated” behind closed doors – bc Bob Dunning was pointing out the obvious – this was an ridiculously one-sided contract that was not in the best interests of the city. And believe, me, a lot of us were thinking/seeing the obvious unfairness of this contract.
Dr. Wu makes some very valid points as well. I’m not convinced, just bc Harriet Steiner says so, that the city is off the hook for liability with respect to possible scenarios. IMHO, this project was rushed through as a politically correct idea of the Climate Action Team (or whatever their correct name is) without much thought put into it. As always, the DEVIL IS IN THE DETAILS.
Not to mention it gives unfair advantage to one business over other rental care companies/UCD Zipcar program already in town, who may have been willing to provide the exact same service for far less cost when taking into account what went into the adhesion contract by Zipcar. There was NO COMPETITIVE BID PUT OUT ON THIS PROJECT.
This is one of the reasons Davis is seen as not friendly to business. Some companies get the “local gov’t process” wheels greased, while others cannot make any headway at all. It all has to to do with who the business happens to know on the City Council or City Staff or whether their particular business is “politically correct”. Fairness rarely enters into the picture.
David,
This is a straw man. Dunning picked one wrong example, but the underlying case remains the same. I am just going to repost the comment I made on one of your previous commentaries:
[quote]I am looking into that issue Dr. Wu, but I don’t believe the city could be sued if someone using a zipcar were involved in an accident. — David Greenwald[/quote]Dr. Wu has it exactly right, David. You will never get a definitive answer, because the liability of entities involved in renting easy-access cars parked permanently near bars has not yet been tested.
In fact, it was only a few months ago that Zipcar was determined to be included under the liability exemptions of rental car companies.
BUT…this exemption does not cover situations where negligence is involved. With a standard rental car company, people typically rent from a living, breathing person. If they are noticeably drunk when they show up, they are not given a car.
With Zipcar, an individual can make a reservation with their mobile phone only minutes before getting into the car parked by the bar (according to Zipcar). Hence, the reservation requirement would NOT be a significant barrier to most intoxicated individuals. I don’t believe that the responsibilities of rental car agencies in such circumstances have been determined yet by the courts.
Since we provide the parking near the drinking establishments downtown free of charge, I suspect we could be named in litigation trying to make the case of negligence. Even if we were to prevail, defense is always expensive.
Zipcar has only been in business for 10 years, is in debt and has never turned a profit. I suspect the city would be viewed as the deep pockets in such a case. And I have spoken with local attorneys specializing in public law who share my concerns.
Sue Greenwald: “Since we provide the parking near the drinking establishments downtown free of charge, I suspect we could be named in litigation trying to make the case of negligence. Even if we were to prevail, defense is always expensive.
Zipcar has only been in business for 10 years, is in debt and has never turned a profit. I suspect the city would be viewed as the deep pockets in such a case. And I have spoken with local attorneys specializing in public law who share my concerns.”
Very good points Sue. As an attorney, I cringe at what the city has agreed to here…
Sue, Could you weigh in on my comments earlier:
1. Revisit issue and either rescind or revise contract (since you are anyway)
2. If CC can revise, what about expanding UCD contract to 1-2 spaces downtown under THEIR contract. Despite budget, their pockets are deeper.
thanks.
We can’t legally revisit the issue or unilaterally revise the contract. It is too late for that now. If the subsidy goes over a certain specified amount (I think 40 some thousand dollars), we can terminate the contract in a year. If not, we can terminate it in two years. At that point, we could discuss all options.
It is exceedingly difficult for any entity, government, non-profit, for profit, to effectively carry out its mission if it’s board or council is regularly in the habit of reviewing/negotiating schedules A, B, C, or any other contractual provision. Such review/negotiation is the responsibility of the executive or the executive’s delegates. It is the responsibility of the board/council to set goals, review/approve the strategies proposed by the executive to achieve the goals, and monitor progress. Either the executive has the confidence of the board/council, or the board/council needs to replace the executive. A critical key is for the goals, strategies, and resources at the executive’s disposal all to be in alignment. Another critical key is for the board/council to avoid undermining the executive, especially in public. This all falls under the concept known as leadership. This stuff is freshman management stuff. How can a board/council be effective if it’s delving into contract provisions?
Another point, EVERYBODY makes minor errors from time to time. A critical key is for the executive to avoid making significant errors. $1 million dollar policy here, $1 million dollar policy there, this in no way rises to the level of a board/council. There are $1 million dollar cross policies strewn all over various types of contracts. Geez!
And finally, why would the Council even consider revisiting the Zipcar issue at this juncture. I’m not a Zipcar supporter, but the Council has approved a policy. Now some Council members are already considering revisiting the policy? Why? Has the policy failed since it was appoved a few short months ago? Or is the resolve of individual Council members eroding under public criticism? Where’s the leadership? The Council has weighed in on the matter, reached a decision, let’s move on. That’s what we elected them for.
How is the Council, and by extension the community, going to effectively rise to the many current challenges we are confronted with if it conducts itself in this fashion?
I think you make a good point DTB. A relatively minor decision for a relatively small amount of money has become a huge focal point when the real issue facing the city, again in my opinion, is the 71% of the general fund going to employee compensation and retirement.
That said, $1 million for this city is not an insignificant amount of money. But this is not a million dollar policy, it’s at most a $74K policy that is not coming from the general fund. I would have liked to have seen a carshare program based on electric vehicles, but from what I’ve read the concept is solid enough.
Whoops! I didn’t mean to exclude from my previous posting the various opportunities for the community to weigh in on policy whether through commission, Council meetings, communicating individually with Council members or City staff, what have you. I hope it’s not to late to avoid incurring the wrath of the other blog participants.
The community is confronted with a number of great opportunities and great challenges, employee compensation and retirement is certainly a very high priority, if not the highest. We are in need of competent leadership to take advantage of these opportunities and meet these challenges. It is critical for the community to support its leaders and to assist them in wise decisionmaking. Nitpicking is counterproductive.
I guess I both agree and disagree with that point. I think in the past we have passed things without enough forethought, I think we probably made that mistake on Zipcar, at the same time, I do think we need to keep things in perspective – there is a difference between rolling the dice on a $74K project and rolling the dice on a million dollar project.
And by the way, I don’t think we should dismiss some of these concerns as nitpicking, we do seem to make the same mistakes repeatedly and unless people point them out, we would continue to do so.
Perhaps we will stop making the same mistakes if we as a community focus our attention and energy on the priorities, instead of focusing on the distractions. Perhaps we will meet our challenges and take advantage of our opportunities if we rise out of our complacancy. Perhaps the Zinfandel has taken control of my keyboard.
[quote] Now some Council members are already considering revisiting the policy? Why? Has the policy failed since it was appoved a few short months ago? Or is the resolve of individual Council members eroding under public criticism? Where’s the leadership? The Council has weighed in on the matter, reached a decision, let’s move on. That’s what we elected them for. —DT Businessman [/quote]No councilmember is “considering revisiting the policy”. At the meeting after the initial vote, one councilmember moved to reconsider the item, and another councilmember seconded the motion. Provision is made for reconsideration only at the meeting following the vote. No councilmember has considered revisiting the policy since.
[quote]Sue G: …I suspect we could be named in litigation trying to make the case of negligence. Even if we were to prevail, defense is always expensive.
Elaine M: As an attorney, I cringe at what the city has agreed to here…
[/quote]
Correct me if I am wrong, but it seems to me that the Zipcar contract can only eliminate the liability of the parties with respect to one another.
Even if ZipCar members sign away their right to sue, their survivors or the driver or pedestrian they hit will still have the right to sue the City. ZipCar will provide insurance coverage of $1,000,000 per occurrence. Over $1,000,000, we’re on our own. Do you think a major accident in which City negligence is alleged might go over $1,000,000? Considering the financial state of ZipCar, whose deep pockets do you suppose the plaintiff in such a lawsuit is most likely to target?
David: There is still YCPARMIA that would fall under the city’s risk management agreement. But it’s hard to imagine that the city would have liability in the case of an accident.
dmg: “David: There is still YCPARMIA that would fall under the city’s risk management agreement. But it’s hard to imagine that the city would have liability in the case of an accident.”
What the heck does YCPARMIA mean? Sorry for my ignorance.
Why do you think the city “renegotiated” this contract, especially the part about the city taking the cars in for maintenance? I wouldn’t be surprised if the city’s insurance carrier balked at the terms and told the city it would not cover Davis under those ridiculous terms in the original approved contract.
dmg: “I think you make a good point DTB. A relatively minor decision for a relatively small amount of money has become a huge focal point when the real issue facing the city, again in my opinion, is the 71% of the general fund going to employee compensation and retirement.”
First of all, a small amount here, a small amount there, adds up. Secondly, the money is not available for other important projects. Many city programs operate on a shoestring, and $74,000 a year would be a big help to such programs/services. But make no mistake, we were not talking about just $74,000 here, but a potential liability in the millions. Had the city been responsible for taking cars in for regular maintenance, and failed to do so, city staffers’ negligence could have cost the city well over the insurance cap. If the victim was young and ended up crippled for life, a sympathetic victim, with lifelong medical needs (say someone who ended up in a permanent coma), who knows what the ultimate costs could have been? Having city staffers responsible for taking cars in for maintenance was a collosal blunder of epic proportion.
DTB: “Perhaps we will stop making the same mistakes if we as a community focus our attention and energy on the priorities, instead of focusing on the distractions.”
I, for one, am glad the contract got “renegotiated” more towards the city’s favor. And I wonder just how many other mistakes were made in this adhesion contract that we haven’t thought of? This was a half-baked idea not well thought through IMHO as an attorney. Others, who are not even attorneys well versed in the law could see right through this one…
David Suder: “Even if ZipCar members sign away their right to sue, their survivors or the driver or pedestrian they hit will still have the right to sue the City. ZipCar will provide insurance coverage of $1,000,000 per occurrence. Over $1,000,000, we’re on our own. Do you think a major accident in which City negligence is alleged might go over $1,000,000? Considering the financial state of ZipCar, whose deep pockets do you suppose the plaintiff in such a lawsuit is most likely to target?”
It is currently much less likely the city could be sued for negligence now that city staffers are not responsible for taking the Zipcars in for maintenance. The big elephant in the room is if there is any other way in which the city could be found negligent. I’d have to read every term of the contract carefully to determine that possibility (that was Harriet Steiner’s job), but in light of the huge mistake that was already made, my radar is beeping like crazy…
Make no mistake, this was Zipgate…
Elaine:
YCPARMIA is the Yolo County Risk Management agency: link ([url]http://ycparmia.com/[/url]) – that’s our insurance pool.
“Why do you think the city “renegotiated” this contract, especially the part about the city taking the cars in for maintenance? I wouldn’t be surprised if the city’s insurance carrier balked at the terms and told the city it would not cover Davis under those ridiculous terms in the original approved contract. “
I suspect that the city was taking heat for the language and figured out a way to eliminate the need for the language.
[quote]First of all, a small amount here, a small amount there, adds up. Secondly, the money is not available for other important projects. Many city programs operate on a shoestring, and $74,000 a year would be a big help to such programs/services. [/quote]
Maybe, but this money was going to be spent on some program that dealt with carbon reduction. I think it’s reasonable to question whether this should have been the first program passed, but the $74,000, if it is $74,000 wouldn’t go to other programs and services because it’s not general fund money.
[quote]But make no mistake, we were not talking about just $74,000 here, but a potential liability in the millions.[/quote]
I don’t see it.
dmg: “I don’t see it.”
Let me give you a scenario. Suppose a 30 year old Davis citizen, making a $100,000 per year, rented a Zipcar that was not taken in by City Staffers for regular maintenance as it should have been. As a result, the car overheated in the middle of the freeway, the engine froze, and the car stalled. It was then rear-ended by a following car. The 30 year old driver ended up in a permanent coma from the accident.
I’m not a personal injury attorney, so I am not familiar with that type of law, so don’t know if there are emotional distress caps (I think there are). But let’s assume the victim can sue for medical costs and lost wages, if nothing else. If you remember, a recent kidnap victim in CA (Jaycee Dugard) was awarded $5 million in damages by the state for lost income, costs of psychiatric assistance, etc. The state knew they didn’t dare let the matter be decided in court, bc they potentially could have been on the hook for a lot more $$$ with such a sympathetic victim. Now do you see my point?
[quote]”Maybe, but this money was going to be spent on some program that dealt with carbon reduction. I think it’s reasonable to question whether this should have been the first program passed, but the $74,000, if it is $74,000 wouldn’t go to other programs and services because it’s not general fund money.”[/quote] David, are you for or are you against dedicating this $74,000 to subsidize Zipcar’s enterprise instead of considering the money for other appropriate options?
And do you realize how many times we’ve seen that tired old canard (“…it’s not general fund money….”) lately in attempts to distract attention from ill-founded proposals that have been rushed through our city council with inadequate staff work and little consideration of alternative solutions or other uses for the money (regardless of the pocket in which it’s sitting). This sequence has become a regular pattern for the City in the last year.
In this particular case, it’s obvious a cover-up is underway. I’m sure you’ll remember the many specific objections and questions (raised here and in other forums early in this discussion)–most of which were rebuffed by Zipcar proponents by ignoring them or by providing obviously faulty responses.
After weeks of misdirection, NOW we decide it’s time to change provisions and clean up the sloppy contract! “But, there’s nothing wrong with the contract; It’s just being changed to placate our poor, misguided Davis citizenry.” Somebody should call bs. Should we believe what Harriet’s telling us now or should we believe our lying eyes (that have seen the contract)?
Sue and Rochelle raised some of these unanswered questions in time to reconsider the contract. But they lost on the reconsideration effort. So, today, “we can’t legally revisit the issue or unilaterally revise the contract. It is too late for that now,” Sue suggests. One still has to wonder, even with the changes finally underway, whether the Zipcar contract is good for the city.
Sue, please help us with the long-unanswered question that remains: Did we even consider supporting the existing UCD Zipcar agreement by providing publicity and parking spaces (getting all the benefits with none of the costs)?
Finally, Sue, does anyone in the city operation have prioritized lists of potential uses for our various piles of cash that are earmarked for non-general-fund uses. It seems as though an increasing number of projects are pushed through and, when questioned, are partly rationalized by noting that we couldn’t have used the money for unrelated things?
I’m going to ask your question in a slightly different way, the Climate Action Team has a number of proposals some of which will be funded from supplementary funds, some from impact fees, and some from grants, is it possible for the council right now to prioritize what projects should be funded first.
DPD: but why is the city needing to be designated on the insurance? More to the point, is the city liable should a Zipcar driver have an accident?
answer your own queston, David. If the city were not liable, the city would have no reason to write in the one million in the contract, would it?
DPD: The liability issue was a legitimate concern, and the language was somewhat ambiguous as to under what circumstances the city could be liable.
DPD:However, it never appeared that the city would be liable should a Zipcar driver get into an accident.
bullshit David. The one million was written in the contract for a reason. and I have as yet to hear anyone explain it away.
futhermore, these two sentences, when put together, contradict each other.
DPD: These changes will clarify that language and remove that issue, at least from the public concerns.
DPD: The bigger issue is a procedural one, and this is a lesson that the entire council needs to learn. We all get frustrated at the length of time issues take to be resolved before the Davis City Council, however the deliberative process is very important.
no, the issue was plain and simple. you and the city were seduced by the environmental sales pitch offered by zipcar, and zipcar milked it for all it was worth and took both you and the city for ride.
WHat is happening right now is DAMAGE CONTROL, plain and simple.
[quote]answer your own queston, David. If the city were not liable, the city would have no reason to write in the one million in the contract, would it?[/quote]
Yes but they were liable under a very specific circumstance that they are now removing from the policy.
dmg: “Yes but they were liable under a very specific circumstance that they are now removing from the policy.”
And how many other big boo-boos has the city made with this contract that we don’t know about? They already made a gigantic mistake – and my guess is the city’s insurance carrier forced the city to renegotiate the contract or else the insurance carrier would have refused coverage. There is no way the insurance carrier would have wanted to be on the hook for $1 million in that way. Had Zipcar refused to renegotiate the contract, and the city could not get insurance coverage, the contract could probably have been nullified e.g. on the grounds of impossibility.
Nor have you really addressed the issue of the noncompetitiveness of this contract, and the damage it may do to the rental car companies already in town, who if asked, may very well have offered the same service for far less. ZIPGATE