Uber Technologies Inc. has announced that rising state-mandated insurance costs are affecting ride affordability, with 32% of each rider’s fare in December 2024 being allocated to these expenses. This announcement was made through a promotional campaign on LinkedIn on February 10.
According to Uber, in California, the company is required to carry $1 million in liability coverage, which is over 30 times the requirement for personal vehicles and 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 requirement applies solely to rideshare drivers, contributing significantly to the cost of a rider's fare. Uber is advocating for reforms to reduce these costs, arguing that they increase fares and affect driver earnings.
Bankrate reports that the average cost of full coverage car insurance in California stands at $3,066 per year, surpassing the national average of $2,670. Minimum coverage costs are $760 annually, with rates varying by city. For instance, drivers in Los Angeles pay an average of $4,158 annually, which is 36% above the state average. Younger drivers face particularly high premiums; for example, 16-year-olds on a parent’s policy average $7,130 per year.
Insurance Business notes that aggressive marketing tactics by billboard attorneys—lawyers who advertise extensively on highways, TV, and social media—are contributing to rising auto insurance costs. These attorneys encourage litigation by promising large settlements, often leading to inflated claims and legal expenses. Additionally, third-party litigation funding (TPLF) further increases premiums as insurers pass rising legal costs onto consumers.
The U.S. Chamber of Commerce describes TPLF as a multibillion-dollar global industry that allows hedge funds, sovereign wealth funds, and other financiers to secretly invest in and control lawsuits in exchange for a share of settlements or awards. Operating largely in secrecy, TPLF drives up settlement costs and prolongs litigation.
Founded in 2009, Uber Technologies Inc. is a global mobility and technology company providing ride-hailing services along with food delivery, freight solutions, and business travel options. The company emphasizes its commitment to safety, sustainability, and innovation.