Uber has announced a new rule raising the minimum age for most of its new drivers in California to 25. This change, effective from Thursday, is a response to the surging costs of commercial auto insurance in the state.
This rule applies only to drivers signing up to transport passengers via Uber’s ride-hailing platform, not those delivering food with Uber Eats. Previously, drivers as young as 19 could sign up for the service. However, drivers under 25 who activated their accounts before Wednesday can continue to drive for Uber.
According to a company statement, insurance rates for Uber’s California drivers are considerably higher than those for personal vehicles or taxi drivers. Uber attributes this disparity to a ‘cottage industry’ of personal injury attorneys specialized in suing rideshare platforms. This has reportedly led to a more than 65% increase in the company’s state-mandated commercial insurance costs in California over the last two years.
To mitigate these escalating costs, Uber has increased the age requirement for new drivers to 25. All 50 states require commercial insurance for drivers to earn money with a ride-hailing service. Uber provides commercial auto insurance for its drivers, including at least $1 million of liability coverage once a ride is accepted. Typically, personal auto insurance doesn’t cover activities on ride-hailing apps.
Lyft, Uber’s main competitor, already has a minimum age requirement of 25 for its drivers. From Thursday, drivers under 25 attempting to sign up with Uber will receive an email explaining the new policy.
The new age restriction comes as Uber experiences a resurgence in passengers following a downturn due to the pandemic. The company is presently handling more rides than in 2019, bolstering its hopes of achieving consistent profitability.
Uber’s food delivery service, Uber Eats, which accounts for a third of the company’s revenue, will continue to allow drivers under 25. Uber plans to work with state lawmakers and industry experts to discuss legislative and regulatory changes that could improve the experience for all California drivers.