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 generous no-fault insurance policies.
Uber leads the ridesharing market with 74% of the ride-hailing market in the United States and its success likely helped make it a target of rings of insurance fraudsters.
Suffolk County, and Long Island in general, are popular for ride-sharing with many people driving for Uber and many others relying on Uber for transportation. Drivers can make anywhere from $35-50,000 a year depending on hours worked and expenses such as gas and maintenance.
Driving for Uber is a popular part-time job for many Americans providing extra income for families and individuals. College students drive between classes for rent money and others drive before or after their regular job to supplement their income and make ends meet.
Since at least 2019, the fraudsters 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 preexisted,” Uber said in the federal suit.
American Transit Insurance Co. (ATIC), the company that insures the drivers, has a “pattern and practice of failing to adhere to reasonable claims-handling practices and failing to reasonably resolve claims and lawsuits on its insured’s behalf,” according to Uber.
Uber maintains that ATIC’s failure to resolve the claims of some of its drivers has led to liability lawsuits. These practices, says Uber, have had the “knock-on effect of provoking unnecessary litigation costing Uber and their drivers who are just trying to make a living.
Costly and fraudulent insurance claims are affecting the business of Uber and those who make a living driving for Uber. Uber said it has already paid and will continue to pay “substantial amounts” to defend the lawsuits.
Insurance claims and lawsuits can be complicated. The basic issue is that AITC does not want to include Uber as an additional insured yet Uber is being sued by these fraudulent “accident gangs”.
Uber is asking the court for a declaratory judgment that ATIC must defend and indemnify it in the underlying lawsuits and that Uber has a right to be defended by independent counsel of its choosing, with legal fees paid by ATIC.
Uber is also seeking monetary damages for alleged breach of contract, attorneys fees, and any legal liability.