Uber Alleges Fraud Scheme by NY Groups Faking Crash Injuries
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Ride-sharing giant Uber Technologies Inc. filed a racketeering lawsuit against a group of law firms, doctors and pain-management clinics it claims staged fake car accidents and performed unnecessary surgeries to take advantage of New York’s lucrative no-fault insurance policies.
Since at least 2019, the group has conspired “to exploit passengers in purported or actual minor vehicle collisions,” provided sometimes “medically unnecessary” or even “invasive and painful surgeries like spinal fusions” for medical conditions that are “fictitious, exaggerated or that pre-existed,” Uber said in the federal suit filed Jan. 30 in Brooklyn, N.Y.
Many states have regulations that allow drivers and passengers to get reimbursed for medical costs or lost wages quickly after an accident, regardless of who’s at fault. But in New York City, taxi industry regulators require cab and rideshare drivers to carry personal injury coverage of as much as $200,000 —significantly more than the $50,000 requirement for individual drivers.
The defendants named in the Uber suit didn’t immediately respond to a request for comment.
Uber CEO Dara Khosrowshahi has vowed to push for insurance and tort reform, including in the company’s home state of California, to address rising insurance costs that he says have been passed along to consumers and contributed to a slowdown in bookings.
(Joel Carillet/Getty Images)
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Uber’s suit comes as regulators struggle to manage the insolvency of New York City’s largest taxi insurer, American Transit Insurance Co. ATIC, as the company is known, insures about 60% of the city’s roughly 120,000 for-hire vehicles. In the second quarter of 2024, it had roughly $700 million in net losses, which the firm blames in part on widespread fraud similar to what’s alleged in the Uber suit.
Uber sued ATIC last year over its handling of claims, saying the insurer’s “unreasonable practices” have resulted in 23 lawsuits brought against Uber and its drivers over crashes, leaving the ride-share giant to pay “substantial amounts” to defend itself in court.
ATIC filed its own massive $450 million racketeering suit in December seeking damages from doctors, medical centers and others for an alleged massive no-fault insurance fraud. That suit is ongoing.
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State regulators and industry stakeholders have met to discuss possible solutions for ATIC’s statutory insolvency, including increasing premium rates and asking other insurance companies to cover the company’s claims. Gov. Kathy Hochul proposed new legislation to make it easier to adjust commercial car insurance rates and allow regulators to slowly phase in increases.
The case is Uber v. Wingate, 25-cv-522, US District Court, Eastern District of New York (Brooklyn).
