Uber has filed a lawsuit against a group of doctors, lawyers, and medical clinics in New York, alleging that they engaged in fraudulent activities by orchestrating fake car accidents and conducting unnecessary surgeries. The aim of these actions was to take advantage of New York’s no-fault insurance system.
According to a federal lawsuit filed in Brooklyn, a group has been accused of orchestrating minor collisions and inflating or fabricating injuries since at least 2019. Uber claims that in some cases, the accidents were genuine, but the chosen treatment was excessive. The ride-hailing company alleges that certain patients underwent invasive procedures, such as spinal fusions, for conditions that either did not exist or were preexisting.
Under New York’s no-fault insurance laws, individuals involved in accidents can receive prompt reimbursement for their medical expenses. However, rideshare drivers are obligated to carry significantly higher coverage, up to $200,000, compared to regular motorists who are required to have coverage up to $50,000. Uber contends that this discrepancy has made its drivers and passengers more susceptible to fraudulent claims.
Uber’s lawsuit is just one facet of a broader conflict surrounding the escalating expenses of insurance. Uber’s CEO, Dara Khosrowshahi, has been actively advocating for insurance and legal reforms, citing fraud and an influx of litigation as key factors driving up costs. In the end, it is the customers of rideshare services who are burdened with the brunt of these mounting expenses, as they are left to contend with higher service rates.
Previously, the company filed a lawsuit against American Transit Insurance Co. (ATIC), the largest taxi insurer in New York, alleging mishandling of claims. According to Insurance Journal, ATIC, which provides coverage for approximately 60% of the city’s for-hire vehicles, has been facing financial difficulties with reported net losses of $700 million. ATIC attributes a significant portion of these losses to widespread fraud and has retaliated by filing its own lawsuit seeking $450 million from medical providers and clinics.
New York regulators are actively seeking solutions to address the financial challenges faced by ATIC. They are currently exploring various options, including potential premium increases and the implementation of new policies, in order to stabilize the market. Governor Kathy Hochul has proposed legislation that aims to provide regulators with greater flexibility in adjusting rates for commercial car insurance.