Uber has initiated a fraud and conspiracy lawsuit against a network of professionals comprising doctors, lawyers, and other specialists. The lawsuit alleges that fraudulent car crashes were orchestrated and then unnecessary or excessive medical treatments were prescribed with the intent of exploiting New York’s Personal Injury Protection (PIP) system, which requires insurers to cover medical expenses and lost wages regardless of who is at fault in an accident.
New York is one of only 12 states in the U.S. that operates under a no-fault insurance system for livery vehicles. This system requires coverage of up to $200,000, ensuring that drivers and passengers are promptly reimbursed for medical expenses or lost wages following an accident, irrespective of the party at fault.
Uber contends that this policy is being manipulated to their detriment. In a federal suit filed yesterday, Uber argued that the aforementioned professionals colluded for over five years to take advantage of passengers caught in minor or entirely fabricated vehicle collisions. In addition, Uber claimed that these passengers were often pushed into undergoing non-essential medical treatments, which may include complicated procedures like spondylosyndesis for conditions that were either invented, overstated, or previously existed.
The Coalition Against Insurance Fraud reports that American consumers lose “at least $308.6B every year” to fraud, putting a toll on cinsumers and insurance companies. American Transit Insurance Co (ATIC), which insures about 59% of New York City’s livery market, is also on the brink of financial collapse. According to recent financial reports, the company is insolvent and reported a staggering $700 million loss in the second quarter of 2024.
This staggering loss prompted ATIC to file a $450 million lawsuit against medical practitioners and others, alleging racketeering—similar to the recent lawsuit filed by Uber. Uber also sued ATIC last year, following 23 lawsuits filed against the ride-sharing company for accident claims involving its drivers between August 2016 and July 2023. In its complaint, Uber alleged that ATIC refused to settle claims for some of its drivers, resulting in liability lawsuits against the company.
Meanwhile, Carmel De La Rosa, a Northern Manhattan City Council member, proposed a bill to reduce New York’s PIP coverage limit from $200,000 to $50,000. While supporters of the initiative argue that the current PIP limit is excessively high and contributes to fraud, critics caution that reducing coverage could compromise the ability to compensate accident victims adequately. They stress that combating fraud should not come at the expense of ensuring fair compensation for those injured. If passed, this legislation could mark a significant step toward curbing insurance fraud in the state.