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Uber Files Racketeering Lawsuit Alleging Auto Insurance-Related Fraud
UBERUber(UBER) PYMNTS.com·2025-01-30 22:33

Legal and Insurance Issues - Uber is suing law firms, doctors, and pain management clinics for allegedly staging car accidents and performing unnecessary surgeries to exploit New York's no-fault insurance policies [1] - A similar racketeering lawsuit was filed by American Transit Insurance Co (ATIC), which reported 700millioninnetlossesinQ22024andblamedfraudforitsfinancialdifficulties[2]−ATICstateditisaddressingsolvencyissuesamidrampantinsurancefraudandescalatingcosts[3]−UbersuedATICin2024,claimingtheinsurer′spracticesledtocrash−relatedlawsuitsagainstUberanditsdrivers[3]ImpactonUberandIndustry−RisinginsurancecostshaveincreasedconsumerpricesandcontributedtoaslowdowninUberbookings,promptingtheCEOtopushforinsuranceandtortreform[4]−Insurancefraudcosttheindustry700 million in net losses in Q2 2024 and blamed fraud for its financial difficulties [2] - ATIC stated it is addressing solvency issues amid rampant insurance fraud and escalating costs [3] - Uber sued ATIC in 2024, claiming the insurer's practices led to crash-related lawsuits against Uber and its drivers [3] Impact on Uber and Industry - Rising insurance costs have increased consumer prices and contributed to a slowdown in Uber bookings, prompting the CEO to push for insurance and tort reform [4] - Insurance fraud cost the industry 308 6 billion in 2022, up from $80 billion in 1995 [4] - Uber expressed concerns that proposed changes to commercial auto insurance requirements in New York City could leave drivers unable to insure their vehicles [5] Business Performance and Strategy - Uber One membership program saw a 70% year-over-year increase, reaching over 25 million members as of Q3 2024 [6] - The company is focusing on growth opportunities beyond major cities [6]