Uber has filed a racketeering suit against a group of legal firms and medical professionals, claiming they staged car crashes and performed unnecessary surgeries to commit insurance fraud, Bloomberg reported. The group allegedly recruited passengers involved in purported or minor vehicle collisions and provided “medical unnecessary… [sometimes] invasive and painful surgeries like spinal fusions,” according to the federal suit filed in Brooklyn yesterday.
Driving the alleged racket is New York’s no-fault insurance, particularly as it applies to cab and rideshare chauffeurs. The city forces those workers to carry personal injury coverage up to $200,000, four times that required for individual drivers — providing potential scammers with lucrative targets.
There are other issues behind the claim. New York City’s largest taxi insurer, ATIC (American Transit Insurance Co.), which insures about 60 percent of the 120,000 for-hire vehicles in the city, recently went insolvent. Uber sued ATIC last year, saying that its “unreasonable practices” spawned 23 lawsuits against Uber, forcing it to deal with the claims itself in court.
On top of that, ATIC itself filed a $450 million racketeering suit in December last year, also seeking damages from doctors and others for insurance fraud. That has left New York with a big mess around the availability and pricing of for-hire insurance, so Governor Kathy Hochul recently proposed legislation to make it easier for insurance to adjust commercial car insurance rate.
Uber has been pushing for insurance and tort reform in multiple states to address rising insurance costs that have hurt its business. The company recently agreed to a $328 million settlement with New York rideshare drivers who were underpaid between 2014 and 2017.
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