Uber says lawsuit abuse driving up Texas rideshare insurance costs

Uber has announced on its website that rideshare insurance costs in Texas are 15% higher, attributing this increase largely to what it describes as lawsuit abuse by plaintiffs' firms. These firms reportedly exploit transportation network company (TNC) insurance requirements and favorable tort conditions.

According to Uber's "Fair Insurance" page, the elevated insurance costs for rideshare operations in Texas are primarily driven by aggressive litigation. The company states that plaintiffs' firms target the mandatory high insurance levels in Texas to push for disproportionately large settlements, even in cases with weak claims. Uber asserts that this legal environment acts as a "social tax," increasing costs not only for TNCs but also for consumers and businesses.

A report titled "Tort Costs in America: An Empirical Analysis," published by the U.S. Chamber Institute for Legal Reform based on Brattle Group analysis, estimates Texas's tort costs at $4,594 per household in 2022, among the highest in the nation. The report notes that overall U.S. tort costs exceed $529 billion, accounting for roughly 2.1% of the U.S. GDP. This is partly due to excessive litigation and large verdicts. The study highlights how litigation costs contribute to higher insurance and operating expenses in states with aggressive tort climates.

The Institute for Legal Reform’s blog indicates that lawsuit costs on Texas households continue to rise, reaching nearly $38 billion by 2022, translating to about $4,594 per household. The blog mentions that "nuclear verdicts" and litigation abuse are significant factors behind this growth. Rising tort costs are passed through to consumers via insurance premiums, regulatory expenses, and business costs. In Texas's case, Uber and other high-exposure industries face particular vulnerability due to mandatory high liability and insurance levels, making them attractive targets for litigation strategies seeking substantial recoveries.

According to Uber’s official website, the company provides detailed information on insurance and liability arrangements by state. It explains how high insurance mandates expose it to litigation risk and cost pressures. Uber describes how these coverage levels—required in certain states—have become focal points for legal claims, often when neither driver nor Uber is significantly at fault. The company uses these disclosures and policy statements to advocate for regulatory balance and push for reforms aimed at mitigating litigation abuse and reducing insurance cost burdens.