When you look at your receipt after using a rideshare app in California – specifically Uber – 32% of your fare goes to covering government-mandated accident insurance.
In Los Angeles County, Uber says it’s 45% compared to just 5% in places like Massachusetts and Washington D.C. That cost is passed onto riders.
A lawsuit filed by Uber in federal court on Monday aims to address the problem by targeting what they call “phantom damages.”
“[It’s] a scheme that is used by lawyers and medical providers to artificially increase the value of a given claim,” explained Adam Blinick, the head of policy and communications at Uber. “So, an attorney may convince a plaintiff not to use their own insurance, not to seek treatment from their own doctor, and instead go to their hand-picked medical provider.”
Uber is suing well-known personal injury attorneys Jacob Emrani and Downtown LA Law Group Igor Fradkin for fraud, accusing them of operating their own network of medical providers they send clients to, including GSK Spine in Encino and Radiance Surgery Center in Sherman Oaks.
“Once they know there’s a million-dollar policy in play, they’re highly incentivized to figure out how do they get to the highest number possible under a million dollars,” said Blinick.
There’s a bill making its way through the state legislature, SB 371, that would lower uninsured and underinsured motorist coverage from $1 million to $100,00, which Uber and lawmakers say would disincentivize alleged fraud from happening in the other forms of insurance required for the rideshare industry.
Co-author Rep. Patrick Ahrens points out how this form of insurance isn’t required for taxis, limos, public buses or personal cars, just rideshare.
“This is only hurting the average person who needs to use the ride,” he said. “This is not hurting the companies. This is not hurting the insurance industry. This is hurting the people who actually need this to get to school, to get to work.”
Eyewitness News reached out to all the defendants in the lawsuit and only heard back from the Downtown LA Law Group, who denies what they call “baseless allegations” and an attempt by Uber to suppress legitimate injury claims.
