Uber has announced that excessive rideshare insurance requirements in certain U.S. states, including California, are raising costs for riders and limiting drivers' ability to earn. The announcement was made on Uber’s website on February 18.
According to Uber, in California, rideshare companies must carry $1 million in liability coverage per trip, which is 30 times the $30,000 per-person requirement for private vehicles. This is also 10 times higher than taxi requirements in Los Angeles and San Francisco. Unlike taxis, transportation network companies (TNCs) are subject to stricter mandates, increasing insurance costs and making rides more expensive for passengers while reducing driver earnings.
Fox 40 reports that Uber has launched a multimillion-dollar digital ad campaign to push for insurance reform in California and three other states. According to the company, 32% of every Uber fare in California goes to mandatory insurance costs. The company claims these high costs stem from "predatory lawsuits and state mandates that personal injury lawyers exploit for profit." The $1 million California ad campaign highlights the financial burden on drivers and riders. "We just want to draw attention to our users that we think there are unnecessary costs they are bearing," said Adam Blinick, Uber’s senior director for policy and communications.
Legal system abuse and aggressive litigation tactics are contributing to rising auto insurance premiums across the U.S., according to Insurance Business. Predatory "billboard attorneys" use aggressive advertising to encourage lawsuits, often leading to inflated medical bills and excessive settlements. Third-party litigation funding (TPLF), where hedge funds finance lawsuits in exchange for a share of settlements, has driven up legal costs. This encourages prolonged litigation and higher payouts, leading insurers to raise premiums to offset expenses. As a result, consumers bear the financial burden through increased insurance rates.
According to its website, Uber is a global mobility platform offering rides, delivery, and freight services with a commitment to safety, innovation, and achieving full sustainability by 2040.