Unfair rideshare insurance requirements raise costs for riders and affect drivers’ ability to earn

State laws around the US require rideshare drivers to have commercial auto insurance. This is necessary because personal auto insurance typically doesn’t cover accidents that occur while earning on platforms like Uber. Each state sets its own commercial auto insurance requirements, which vary dramatically by state. While most states permit the driver, Uber, or a combination of both to satisfy these requirements, Uber buys commercial auto insurance for drivers so they don’t have to pay for expensive annual policies themselves. Learn more about Uber’s insurance coverage here.

Rideshare drivers commonly have higher commercial auto insurance coverage requirements than other vehicles on the road, including taxis, limousines, and commercial livery vehicles. In California, for example, the $1 million liability coverage requirement imposed on Uber and other TNCs (transportation network companies) is currently more than 30 times that of personal vehicles on the road, which is required at just $30,000 per person. It’s also far higher than that required of taxis, at 10 times the LA and San Francisco coverage requirements per person (taxi requirements change from city to city). In 2020, the City of San Francisco temporarily lowered the liability insurance requirements for taxis from $1 million to $100,000 per person and $300,000 per accident to help with pandemic recovery, and it has not yet reverted to previous levels. In New Jersey, TNC trips are required to have $1.5 million in liability coverage, which is 30 times the $50,000 requirement per incident for personal vehicles. It’s also significantly larger than the $1 million liability coverage requirement for rideshare trips in most other states.

Legislative wins

Across the country, Uber is leading advocacy efforts to pass commonsense legislative changes that keep all trips insured while bringing down costs. Over the past few years, several states—including Arizona, California, Florida, Georgia, Nevada, New York, Virginia, and Washington—have passed meaningful reforms to either bring down UM/UIM TNC insurance requirements or help curb legal abuse. These reforms are expected to help—or have already helped—stabilize insurance costs. We’ve already seen a more stabilized insurance industry in Florida, for example, where these changes have resulted in $1 billion in refunds from insurers to Florida drivers.

Riders feel the impact directly through the cost of their trips, and riders in states with very high insurance requirements pay more than riders do in states with more reasonable requirements. In New Jersey, for example, nearly one-third of the rider’s fare goes to pay for state-mandated insurance costs. More than half of that total is due to the UM/UIM requirement alone. In New York State, where the TNC liability requirement matches the UM/UIM requirement at $1.25 million, 28% of the rider’s fare on average goes to mandatory insurance costs. In comparison, in places like Washington, DC, and Massachusetts, less than 5% of a rider's fare goes to mandatory insurance costs.²