Uber said they won’t recruit drivers under 25 years old in California due to the state’s elevated insurance rates and legal landscape.
No Uber Drivers Under 25 In California
Last month, the California Supreme Court determined that Uber could not restrict drivers from taking legal action against the company for labor law breaches, even after agreeing to handle work-related legal disputes through private arbitration.
Insurance firms, obligated to maintain steady rates, have seen rates surge twofold or threefold following the removal of restrictions, coupled with rising inflation, causing some insurers to terminate policies due to high costs.
With increased expenses in an industry prone to litigation, Uber opted to revise its policies.
Previously, Uber hired individuals from the age of 21, while its food delivery arm, Uber Eats, enlisted drivers as young as 19.
In an announcement on Thursday, Uber indicated that the new minimum age for rideshare drivers is now 25, while Uber Eats drivers will retain a minimum age of 19.
This distinction is attributed to Uber Eats’ significant contribution to the company’s revenue and the absence of passenger responsibility for its drivers.
“California’s insurance coverage requirements for rideshare are baselessly higher than nearly every other car on the road: up to 10 times that of taxis and thirty times that of personal vehicles,” said Uber. “As a result of these lopsided requirements, personal injury attorneys have created a cottage industry specializing in suing rideshare platforms like ours, pushing Uber’s California state-mandated commercial insurance costs to rise by more than 65% in just two years. By increasing the age requirement for new drivers to 25, we hope to mitigate the growth of those costs.
“We hope to discuss legislative and regulatory changes that will improve the experience for all California drivers.”
While no new drivers under 25 will be onboarded, existing drivers under this age will be retained. This age adjustment aligns Uber with Lyft, which has maintained a minimum age of 25 for years.
The decision was expected by many observers in California’s insurance sector, as rising insurance rates prompted various companies with drivers to contemplate analogous revisions.
Employment lawyer Esteban Gomez Jr. remarked, “Uber won’t be the solitary company making such substantial adjustments due to elevated insurance rates. Earlier this year, numerous insurance companies either terminated new homeowner insurance policies or significantly curtailed their issuance. This wasn’t arbitrary; it was a response to California’s lawsuit-friendly environment and escalating wildfire risks. They reached a tipping point and had to take dramatic action. The same scenario unfolded with Uber today. As insurance rates soared and litigation risk heightened, coupled with a surge in road accidents, Uber reached its threshold.”
On Thursday, other rideshare enterprises and delivery services did not reveal intentions to implement parallel measures.
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