Uber has announced that rising state-mandated insurance costs are impacting ride affordability, with 32% of each rider's fare in December 2024 allocated to these expenses. The company shared this information through a promotional campaign on Facebook on February 10.
According to Uber's website, the company is required to maintain $1 million in liability coverage in California. This amount is over 30 times the personal vehicle requirement and ten times higher than taxi mandates in cities such as Los Angeles and San Francisco. Additionally, rideshare drivers must have $1 million in uninsured/underinsured motorist (UM/UIM) coverage, a requirement not imposed on other drivers. These insurance costs account for nearly one-third of a rider’s fare.
The U.S. Chamber of Commerce describes third-party litigation funding (TPLF) as a multibillion-dollar global industry that enables hedge funds, sovereign wealth funds, and other investors to finance and influence lawsuits in exchange for a portion of settlements or awards. Operating with minimal transparency, TPLF contributes to higher settlement costs and extended litigation.
Billboard attorneys, who heavily advertise on highways, TV, and social media, are reportedly driving up auto insurance costs through aggressive marketing tactics. By promoting litigation and promising large settlements, they often lead to inflated claims and increased legal expenses. Insurance Business reports that third-party litigation funding further raises premiums as insurers transfer rising legal costs to consumers.
Established in 2009, Uber Technologies Inc. is a global mobility and technology company offering ride-hailing, food delivery, freight, and business travel services. According to its website, Uber emphasizes safety, sustainability, and innovation while reimagining transportation.