You might (rightly) think insurance is a racket, but Uber means it literally. According to Bloomberg, the ride-hailing company recently filed a racketeering lawsuit that alleges a vast criminal conspiracy in which law firms, doctors, and pain management clinics teamed up to stage fake car accidents and resulting injuries in order to cash in on insurance payouts from Uber.
So here is Uber’s telling of the situation, as told by a filing submitted to the US District Court in the Eastern District of New York: Since 2019, a ring of legal and medical professionals in New York have been targeting people involved in car accidents. They grab people who have been in “purported or actual minor vehicle collisions,” making excessive claims as to the injuries they suffered in the wreck, and putting them through “medically unnecessary” and “invasive and painful” surgeries that Uber ultimately has to pay for. According to Uber, many of the medical conditions are “fictitious, exaggerated or that preexisted,” and some of the procedures to address those injuries are extreme, including “spinal fusions.”
New York State requires Uber and other ridesharing apps to maintain liability insurance on their drivers, which covers any injury that may occur to a driver or passenger as part of a ride hailed through the service. In New York City, regulations require drivers to maintain personal injury coverage, as well, for a minimum of $200,000. New York is a no-fault state, which means that insurance has to pay for coverage no matter who was “at fault” for an accident occurring—something that Uber claims these law firms and doctors were taking advantage of.
Uber is not the first company to raise the prospect of fraudulent insurance claims in New York. The American Transit Insurance Co. (ATIC), New York’s largest taxi insurer, filed a similar case last year that claimed medical providers had defrauded the company of $450 million. The lawsuit contains many of the same claims Uber made, that doctors are intentionally over-diagnosing, over-treating, and over-billing for injuries sustained from car accidents in order to cash in on the insurance policies.
New York’s governor, Kathy Hochul, recently proposed several changes to how the insurance industry operates within the state, in no small part at the behest of ATIC as it faces major solvency issues. The proposals would include additional resources for looking into insurance fraud like the kind that both ATIC and Uber are alleging targets them.
Uber, meanwhile, just successfully killed a proposal that would have required rideshare drivers in New York City to get insurance coverage from “solvent and responsible” insurance carriers, instead getting the language swapped to carriers “issued by companies authorized to do business” in New York. Make of that change what you will.