Uber is suing a group of doctors, lawyers, and medical clinics in New York. The rideshare company asserts the group staged fake car accidents and performed unnecessary surgeries to exploit New York’s no-fault insurance system.

The federal lawsuit, filed in Brooklyn, claims that since at least 2019, this group orchestrated minor collisions and exaggerated or fabricated injuries. In certain cases, the accidents were real, but the selected treatment was excessive. Some patients, Uber alleges, underwent invasive procedures like spinal fusions for conditions that either didn’t exist or were preexisting.

New York’s no-fault insurance laws allow quick reimbursement for medical costs after an accident. Rideshare drivers are required to carry much higher coverage (up to $200,000) than regular motorists ($50,000). Uber argues that this disparity made its drivers and passengers prime targets for fraudulent claims.

Uber’s lawsuit is part of a larger battle over rising insurance costs. CEO Dara Khosrowshahi was already pushing for insurance and legal reform, saying fraud and “excessive” litigation led to higher costs. Ultimately, rideshare customers are forced to bear increased service rates.

The company previously sued American Transit Insurance Co. (ATIC), New York’s largest taxi insurer, accusing it of mishandling claims. Insurance Journal reported that ATIC, which covers about 60% of the city’s for-hire vehicles, has faced financial struggles, reporting $700 million in net losses. It blames much of this on widespread fraud and filed its own $450 million lawsuit against medical providers and clinics.

New York regulators are searching for solutions to ATIC’s financial woes, considering premium hikes and new policies to stabilize the market. Governor Kathy Hochul proposed legislation to give regulators more flexibility in adjusting commercial car insurance rates.