Uber claims state-mandated insurance requirements account for 32% of total fares, contributing to rising costs

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 made this announcement via a YouTube video on February 18.

In California, Uber is required to maintain $1 million in liability coverage, which exceeds the requirement for personal vehicles by over 30 times and is ten times higher than taxi mandates in cities such as Los Angeles and San Francisco. Additionally, a $1 million uninsured/underinsured motorist (UM/UIM) coverage mandate applies exclusively to ride-share drivers, contributing significantly to the cost of a rider’s fare. Uber is advocating for policy reforms, stating that these costs lead to increased fares and reduced driver earnings.

According to Insurance Business Magazine, California's escalating auto insurance premiums are influenced by litigation abuses often perpetuated by aggressive personal injury lawyers, commonly referred to as "billboard attorneys." These attorneys employ assertive marketing tactics, including highway billboards and social media campaigns, promising substantial financial rewards for clients. This surge in litigation contributes to increased claims costs, which insurers pass on to consumers through higher premiums.

The Southern California Record reports that California’s strict regulations and rising litigation costs are making it more challenging to operate profitably, resulting in higher premiums for consumers. The American Tort Reform Association (ATRA) identified Proposition 65 lawsuits and the Private Attorneys General Act (PAGA) as key drivers of excessive litigation. ATRA states: "The list of issues with the state’s civil justice system is endless. Rather than address the abuses and improve the litigation climate, state leaders seem to embrace the Judicial Hellholes moniker."

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.