Uber has announced that excessive rideshare insurance requirements in several U.S. states, including California, are increasing costs for both riders and drivers. The announcement was made on Uber’s website on February 18.
According to Uber's website, legal system abuse has contributed to rising insurance costs in the rideshare industry. Its U.S. rideshare insurance expenses have surged by approximately 50% per trip in the past three years, despite a decline in crash rates from 2017 to 2022. The trend extends beyond ridesharing, as personal vehicle insurance costs have risen by 30% nationwide during the same period. Additionally, the American Tort Reform Association estimates that legal system abuse costs each American $1,424 annually, totaling nearly $6,000 for a family of four.
Fox 40 reports that Uber has launched a nationwide, seven-figure digital ad campaign advocating for legal and insurance reform in California, Georgia, Nevada, and New York. The company says 32% of every Uber fare in California goes toward mandatory insurance costs, which it attributes to "predatory lawsuits and state mandates that personal injury lawyers exploit for profit." Uber’s senior director for policy and communications, Adam Blinick, said: "We just want to draw attention to our users that we think there are unnecessary costs they are bearing."
California has been ranked by the American Tort Reform Association as a "Judicial Hellhole" for 15 years due to excessive litigation, aggressive consumer lawsuits, and costly regulations like Proposition 65. A 2021 study found that tort reform could save $22.6 billion, reducing a $574 per person "tort tax." The state handles over 50% of all U.S. class actions, making it a hotspot for legal abuse.
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.