Uber Sues Over Alleged Fake Car Crash Scheme

The rideshare giant Uber has filed a lawsuit against several law firms, doctors, and pain management clinics in New York. Uber claims these groups have been faking car accidents to exploit the state’s no-fault insurance system. This means they’re allegedly staging minor crashes or approaching those involved in a minor crash and then having the supposed victims undergo unnecessary medical treatments to recover insurance money.

Per Transport Topics:

Since at least 2019, the group has 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 pre-existed,” Uber said in the federal suit filed Jan. 30 in Brooklyn, N.Y.

As Richmond car accident lawyers, we’ve seen our fair share of insurance companies and big corporations working to minimize payouts when they are liable for injuries to others. So when Uber filed this lawsuit, we had to take a closer look. While fraud is a serious issue, could this lawsuit really be about something else — like an attempt to avoid legitimate payouts to injured Uber passengers and drivers?

Let’s break down what Uber is claiming, why it matters, and why this lawsuit might not be as straightforward as it seems.

What is no-fault insurance?

First, we should discuss no-fault insurance. In many states, New York included, no-fault insurance allows drivers and passengers to quickly receive payments for medical expenses and lost wages after an accident – regardless of who was at fault. This system allows people to get the help they need without long, drawn-out legal battles.

In New York City, the rules are even more specific. Taxi and rideshare drivers must carry up to $200,000 in personal injury coverage. This is significantly higher than the $50,000 required for individual drivers. The idea is to protect passengers and drivers alike.

What is Uber claiming?

Per Uber’s lawsuit, since at least 2019, these law firms, doctors, and clinics have been working together to exploit this system. Uber claims the scheme works as follows:

• They allegedly set up minor car accidents involving Uber vehicles. Sometimes, these accidents didn’t even happen and were entirely fabricated. Other times, someone may approach a person who was involved in a real but minor crash.
• They then send the “injured” passengers to specific doctors and clinics, where they undergo medical treatments. Uber claims that some of these treatments are unnecessary and can even be invasive and painful, like spinal surgeries.
• The medical providers then bill Uber’s insurance for these treatments, collecting large sums of money.

Uber also argues that many of the medical conditions being treated are either exaggerated, made up, or existed before the supposed accident. They claim this scheme is designed to take advantage of the high insurance coverage rideshare drivers are required to carry in New York City.

What legal action is Uber taking?

As a response to this alleged scheme, Uber filed a civil racketeering lawsuit in federal court in Brooklyn, New York. Racketeering means dishonest and fraudulent business dealings. It’s a serious charge often associated with organized crime. By filing this lawsuit, Uber is trying to hold these parties accountable and seek compensation for the money lost due to these fraudulent claims.

Is Uber really the victim here?

If fraud is indeed happening, that’s a problem. However, Uber clearly has an interest in avoiding responsibility for accident claims. Our Richmond car accident attorneys have represented clients who were seriously and obviously injured in crashes but who were treated by insurers with skepticism and attempts to avoid liability.

Uber’s business model is also designed to minimize their liability. They classify their drivers as independent contractors, which has the effect of limiting their responsibility for accidents. Uber also uses arbitration clauses to limit legal options for those injured in crashes involving their vehicles.

In New York, Uber’s insurance must cover medical costs for injured passengers. However, the company may still argue that the injuries the passengers sustained were less serious than they really were. It’s not uncommon for insurers to claim that an accident victim is exaggerating their injuries, trying to claim damages for pre-existing injuries, or flat-out lying about being injured.

While injury claims against the company continue to rise, the temptation to avoid responsibility may also be increasing. It is worth asking whether this is a real fight against fraud or just a way to undermine future injury claims.

If Uber convinces the courts that fake accidents are a major problem, it could use this to cast doubt on current and future legitimate injury claims. If you’re injured in a real Uber accident, the company might argue that you’re part of a scam, even if you have the medical records to prove your injuries.

Uber’s lawsuit specifically calls out law firms representing injured passengers. The threat of fraud allegations could have a chilling effect on lawyers, doctors, and injury victims. If injured parties are afraid of being sued, they may be less likely to pursue the compensation they’re owed.

And not all Uber-related injuries are fake. The victims who suffer injuries in these crashes deserve justice.

Why this matters if you’ve been injured in an Uber accident

If you’ve suffered an injury in an Uber car accident, don’t let this lawsuit scare you away from filing your claim. While fraudulent claims do exist, the majority of car accident victims have real injuries and deserve their fair compensation. Uber always has an interest in minimizing how much it pays for injuries. This is why you need the experienced Richmond car accident lawyers at Phelan Petty on your side.

No matter what Uber claims, if you’ve been hurt, you have the right to seek legal help and fight for the compensation you deserve. At Phelan Petty, we’re here to help. Contact our Richmond personal injury law firm today for a free consultation — we’re here to fight for the compensation you deserve. To schedule a free consultation at our Richmond offices, please call or fill out our contact form.