Uber Files Racketeering Lawsuit Alleging Auto Insurance-Related Fraud
Uber Technologies is reportedly suing a group of law firms, doctors and pain management clinics, alleging they staged car accidents and performed medically unnecessary surgeries.
The ridesharing firm’s racketeering lawsuit alleges that the defendants aimed to take advantage of New York’s no-fault insurance policies, which enable drivers and passengers to get reimbursed quickly after an accident, and have done so since at least 2019, Bloomberg reported Thursday (Jan. 30).
A similar racketeering suit was filed in December by New York City’s largest taxi insurer, American Transit Insurance Co. (ATIC), according to the report. ATIC, which is insolvent and had $700 million in net losses in the second quarter of 2024, has blamed its difficulties in part on the sort of fraud it and Uber are alleging in their separate lawsuits.
In a September public announcement posted on its website, ATIC said it is “working tirelessly to address a longstanding issue of statutory solvency amid rampant insurance fraud and escalating costs.”
Uber sued ATIC in 2024, alleging that the insurer’s practices resulted in crash-related lawsuits being filed against Uber and its drivers, Thursday’s Bloomberg report said.
Uber CEO Dara Khosrowshahi has said that rising insurance costs have led to higher costs for consumers, contributing to a slowdown in Uber bookings, and he will push for insurance and tort reform, per the report.
Fraud cost the insurance industry $308.6 billion in 2022, up from $80 billion in 1995, according to an analysis commissioned by the Coalition Against Insurance Fraud.
Uber told New York City’s taxi regulator in December that proposed changes to commercial auto insurance requirements could leave drivers unable to insure their vehicles.
The company asked the Taxi and Limousine Commission to be lenient on the adoption deadline for the proposed rules, to allow existing policies to remain valid until they expire and to lower personal injury protection limits.
Uber reported in quarterly earnings released Oct. 31 that its membership program, Uber One, had seen a 70% year-over-year increase in membership and had more than 25 million members. The company also said it was looking beyond major cities for additional growth.
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