News / Convoy sued after claims its business model 'contributed to' fatal accident

Photo: Convoy

News that digital freight brokerage start-up Convoy cancelled all loads yesterday, and is in the midst of a “transition”, may not only be due to a challenging market.

On Monday, following a fatal accident, a lawsuit was filed against the firm, claiming its business model of prioritising speed and efficiency is “at the expense of safety”.

The lawsuit could see Convoy, founded by Amazon executives, and a darling of tech VCs, liable for considerable damages.

Industry reports said Convoy noted that “all shipments have been cancelled from our marketplace” just a day after the complaint, against Convoy, Procter & Gamble (P&G), Premier Trailer Leasing, Prowheeler, Trans Terra Express and a driver was filed. It alleges “vicarious liability and negligence” against Convoy and a list of other allegations, including fraud and recklessness, against the other defendants.

The case questions Convoy’s business model and its ability to ensure safe shipment of goods.

In October, 2021, Samantha Figueroa died after being struck by a tractor trailer driver when she became stranded on the roadside. The driver, Uriel Estrada, was carrying a load for P&G, which had been brokered by Convoy. The trailer was leased from Premier and sported Convoy livery.

The driver, according to the plaintiff, had a long string of driving violations and accidents with numerous licence suspensions “which should have put [the defendants] on notice that defendant Estrada was an extremely dangerous driver who should not have been behind the wheel of a tractor-trailer truck”.

At the time of the fatal accident, Mr Estrada’s ‘A’ driving licence was suspended, while the truck, owned by Prowheeler, was not legally compliant.

The lawsuit alleges that Convoy’s business model could have contributed to the accident. It alleges: “Convoy Inc believed that faster shipping and making available to shippers a wider pool of drivers who may or may not have met minimum safety and skills was critical to create the convenience factor to lock shippers and motor carriers looking for loads in to relying on Convoy Inc.”

It adds: “Despite knowledge that injuries and risk of death to the public would likely increase as a result of the decision to offer and/or continue to hire substandard drivers and motor carriers … to attempt to meet shippers’ needs and garner billions of dollars of venture capital investment in the company.”

It alleged Convoy “hired thousands of carriers and drivers, including Prowheeler and Estrada, with little to no experience or safety ratings in its delivery personnel, offered those workers training which was inadequate … in order to achieve its company goal to increase Convoy Inc’s profits, gain an upper hand on its competitors and/or reduce reliance on other shipping firms”.

It also alleged Convoy “mandated a driver delivery schedule that was unrealistic such that it forced the drivers to rush to the point that it was unsafe and as a practical matter made it impossible to drive safely”; and “exerted a level of control over the method and manner of the freight deliveries, but negligently mandated compliance targets for the carriers it hired… that focused on speed and delivery efficiency without giving due consideration to safety of the public”.

After an investigation, Prowheeler and Mr Estrada were cited by state police for 10 violations of US law, primarily concerning a lack of documentation, including no proof of insurance and no proof of vehicle inspection.

Much of the case alleges cost-cutting by the defendants had helped contribute to the accident. It claimed Convoy “deliberately selected the unrated motor carrier Prowheeler”, and was negligent in hiring Prowheeler and Mr Estrada, and in failing to have appropriate procedures in place.

“As an entity with both a broker and a motor carrier designation and that operates a network and has more than 400,000 trucks and a roster of shippers including Home Depot, Procter & Gamble, Unilever and Anheuser-Busch, defendant Convoy Inc knew it had a duty to properly qualify, train, educate, monitor and control its drivers …

“At a minimum, [Convoy] was negligent because it should have taken a moment to pull the SAFER SEARCH on Prowheeler and it would have seen Prowheeler’s crash history and out-of-service notification.”

The lawsuit claims it is entitled to recover “the full value of life as permitted under Connecticut law … and special damages, including but not limited to, medical expenses, funeral expenses, burial expenses, and other miscellaneous expenses, in an amount that will be proven at trial. The estate is also entitled to recover for Ms Figueroa’s general damages, including pre-death pain, consciousness of death and mental suffering.”