Uber has announced that rising costs associated with California's insurance laws now account for 32% of an Uber fare, placing a financial strain on both consumers and rideshare services. The announcement was made in a LinkedIn ad on February 17.
According to Uber, California mandates a $1 million liability coverage for rideshare drivers, which is more than 30 times the requirement for personal vehicles and 10 times that for taxis in major cities like Los Angeles and San Francisco. Additionally, the state requires $1 million in uninsured/underinsured motorist (UM/UIM) coverage, a cost that significantly impacts fares.
CBS News reports that Uber raised the minimum age for new drivers in California to 25 due to the rising costs of commercial auto insurance. State-mandated insurance expenses had increased by more than 65% in just two years, driven by high liability requirements and legal claims. Uber said that personal injury attorneys had exploited these regulations, contributing to the sharp rise in insurance costs for rideshare operators.
As per CLM, 60% of Americans believe attorney advertising increases the number of auto insurance claims and settlement values. Furthermore, 52% of respondents think attorney advertising raises the overall cost of auto insurance by encouraging more legal involvement. Data from the Travelers Institute revealed that over 16 million attorney advertisements aired in the U.S. last year, with around 1,900 legal ads airing per hour on television alone.
Founded in 2009, Uber Technologies Inc. is a global mobility and technology company providing ride-hailing, food delivery, freight, and business travel solutions. With a mission to reimagine movement, Uber is committed to safety, sustainability, and innovation, aiming for a fully electric, zero-emission platform by 2040.