Uber claims California's insurance requirements drive up costs for riders and limit driver earnings

Uber has announced that insurance requirements in California are leading to increased costs for riders and reduced earnings for drivers. The company made this announcement on its website on February 18.

According to Uber's website, California mandates that Uber and other rideshare companies maintain $1 million in uninsured/underinsured motorist (UM/UIM) coverage per incident. In contrast, taxis in Los Angeles and San Francisco are not required to have any UM/UIM coverage. This discrepancy results in higher costs for riders, with 32% of an Uber fare in California and 43% in Los Angeles County being allocated to insurance alone.

California has been ranked third on the 2023-2024 "Judicial Hellholes" list by the American Tort Reform Association (ATRA). The rankings address issues such as lawsuit abuse, excessive verdicts, and litigation tourism, which contribute to elevated insurance and consumer costs. Lawsuits exploiting the Americans with Disabilities Act (ADA), "no-injury" claims, and nuclear verdicts exceeding $10 million are identified as significant factors increasing auto insurance premiums for residents.

The Consumer Price Index (CPI) for motor vehicle insurance in the United States has risen from 451.007 in January 2015 to 887.651 in January 2025, marking a 96.8% increase over the past decade. The U.S. Bureau of Labor Statistics attributes the steepest increases between 2021 and 2024 to rising claim costs, litigation, and inflation.

Uber describes itself on its website as a global mobility platform offering rides, delivery, and freight services, with a focus on safety, innovation, and achieving full sustainability by 2040.