Uber alleges inflated injury bills in LA insurance fraud lawsuit

(Bloomberg) --Uber Technologies Inc. is suing a group of lawyers and medical providers in Los Angeles who it says have made fraudulent insurance claims that cost the company millions in legal fees — the third such lawsuit it's filed this year.

In the federal case, filed Monday in the central district of California, Uber accused the defendants of directing passengers to "pre-selected medical providers" who submitted inflated bills to treat negligible or non-existent injuries from minor collisions between 2019 and 2024. Uber said the personal injury lawyers named in the case took advantage of a state-mandated $1 million rideshare insurance policy limit by fraudulently inducing "significantly larger settlement payments." In one case, it said, the medical bill was 10 times more than the norm. 

This lawsuit is intended to "recover the full extent" of the millions of dollars of harm from the resulted defense costs and settlements," Uber said. "The scheme remains ongoing, and Uber continues to suffer," it added. The company is also backing state legislation that lowers insurance coverage limits for rideshare companies.

The defendants named in the suit didn't immediately respond to requests for comment.

This is the third racketeering lawsuit Uber has pursued against lawyers and medical practices who it says are taking advantage of lucrative insurance policies and seeking high payouts. It filed its first such case in New York, followed by a similar one in south Florida. The effort is part of a broader campaign by the company to reduce mounting insurance costs, which it's passed down to customers in the form of higher trip fares. This in turn has exacerbated a slowdown in its US rideshare business, Uber has said.

The company has estimated that insurance comprises as much as 32% of fares in California, and up to 45% of fares in LA county — among the highest in the country.

Read More: Uber Targets Injury Lawyers in Multimillion Dollar Ad Campaign

The rideshare giant has also poured millions of dollars into local and national ad campaigns this year to push for legislative reforms in insurance policies. Last week, Uber expressed "strong support" for a California senate bill that would lower the limit of uninsured and underinsured motorist coverage provided by rideshare companies, according to a July 16 testimony made by Director of Policy Ramona Prieto. Rideshare peer Lyft Inc. also supports the bill.

Uber has had some success on the legislation front. In June, the New York City Council passed similar legislation the company supported that slashed taxi and rideshare insurance requirements in personal injury protection coverage. 

The case is Uber v. Downtown LA Law Group et al, 2:25-cv-06612 US District Court, Central District of California.

To contact the author of this story:
Natalie Lung in New York at flung6@bloomberg.net