According to the organization, law firms and medical specialists set up phony car accidents.
According to Bloomberg, Uber has launched a racketeering lawsuit against a group of medical professionals and legal businesses, alleging that they staged vehicle accidents and performed unneeded procedures in order to commit insurance fraud. According to the federal lawsuit that was filed in Brooklyn yesterday, the group is accused of recruiting passengers who were engaged in minor or alleged vehicle incidents and providing them with "medically unnecessary... [sometimes] invasive and painful surgeries like spinal fusions."
New York's no-fault insurance, especially as it relates to taxi and rideshare drivers, is the driving force behind the alleged racket. The city requires those personnel to have personal injury coverage of up to $200,000, which is four times the amount needed for individual drivers. This creates a situation where potential scammers have attractive targets.
The claim is based on other problems. American Transit Insurance Co. (ATIC), the largest taxi insurance company in New York City, recently went bankrupt. ATIC provides insurance for around 60 percent of the 120,000 for-hire vehicles in the city. Last year, Uber filed a lawsuit against ATIC, claiming that its "unreasonable practices" led to 23 lawsuits being filed against Uber, which meant that Uber had to handle the accusations in court on its own.
In addition, ATIC itself launched a racketeering lawsuit in December of last year, seeking $450 million in damages from doctors and others for insurance fraud. As a result, New York is currently dealing with a significant problem regarding the availability and pricing of for-hire insurance. To address this issue, Governor Kathy Hochul has recently put forward a proposal for legislation that would make it easier for insurance companies to change the rates for commercial car insurance.
Uber has been advocating for changes to insurance and tort laws in a number of states in order to address the increase in insurance prices that has negatively impacted its company. The firm has recently reached a settlement with New York ridesharing drivers who were paid less than they should have been between 2014 and 2017. The deal is worth $328 million.
