California’s New Rideshare Law: A Guide for Riders

California has enacted a major legislative deal that will reshape the rideshare landscape for companies like Uber and Lyft. This landmark agreement, a compromise between labor unions and the rideshare giants, grants drivers the ability to unionize in exchange for a significant reduction in the insurance coverage these companies must provide. For the millions of Californians who rely on rideshare services, this change has critical implications for both cost and safety.

While the deal may lead to more stable fares, it drastically lowers the financial protection available to passengers injured in an accident caused by an uninsured or underinsured driver. At Walch Law, we believe it is essential for riders to understand this new reality. This article explains what the new law entails, how it affects your rights after an accident, and why legal guidance is more important than ever.

What Is Changing with California’s Rideshare Law?

After years of debate over driver classification and benefits, California lawmakers struck a compromise. The new law allows rideshare drivers to form a union and collectively bargain for wages and working conditions. To secure this agreement, a major concession was made: the mandatory uninsured/underinsured motorist (UM/UIM) insurance coverage provided by Uber and Lyft has been slashed.

Previously, rideshare companies were required to carry a $1 million UM/UIM policy. This policy protected passengers if they were injured by a driver who had no insurance or not enough insurance to cover the damages, including in hit-and-run scenarios.

Under the new law, this coverage is reduced to:

• $60,000 per person for injuries
• $300,000 total per accident

This is a massive reduction in the safety net that passengers once had. While a $1 million policy could cover catastrophic injuries, the new, lower limits may not even be enough to pay for a single major surgery, let alone long-term care or lost income.

The Impact on Rider Fares and Financial Risk

Rideshare companies argued that the $1 million insurance mandate drove up their operational costs, which were passed on to consumers through higher fares. By lowering this requirement, the new law aims to keep rides affordable and prevent future price hikes.

However, this affordability comes at a steep price for rider safety. The financial risk of a serious accident has now shifted from the multi-billion dollar corporations to the individual passenger. If you are severely injured by an uninsured driver while riding in an Uber or Lyft, the $60,000 policy limit could be exhausted quickly, leaving you responsible for covering the remaining costs.

Consumer protection advocates have warned that this change leaves riders dangerously underinsured. While the chance of being in a severe accident is low, the consequences are now far more devastating for those who are.

What Happens if You Are Injured in a Rideshare Accident Now?

The new law fundamentally changes how you can recover compensation after an accident. Here is what riders need to know about the new legal landscape.

When the Rideshare Driver Is At Fault

If your Uber or Lyft driver causes the accident, the good news is that nothing has changed. Rideshare companies are still required to maintain a $1 million liability insurance policy to cover injuries and damages caused by their drivers. If your driver runs a red light and hits another car, this policy will cover the resulting harm to you and others involved.

When an Uninsured Driver Is At Fault

This is where the new law creates significant risk. If another driver with no insurance (or insufficient insurance) hits your rideshare vehicle, your primary source of compensation is now the reduced $60,000 UM/UIM policy.

Here’s how this scenario plays out:

1. Exhausting the Rideshare Policy: Your initial claim will be against Uber or Lyft’s $60,000 UM/UIM coverage. In cases with serious injuries, this amount can be depleted by the initial hospital bills alone.
2. Relying on Your Own Insurance: If you have your own auto insurance policy with UM/UIM coverage, it can act as a secondary layer of protection. Your personal policy may kick in once the rideshare’s coverage is maxed out. This makes it crucial to review your own insurance and ensure you have adequate limits.
3. Suing the At-Fault Driver: You always have the legal right to sue the driver who caused the crash. However, a person driving without insurance often has few assets, making it difficult or impossible to collect any money from a judgment.

This new reality makes rideshare accident claims far more complex. Instead of relying on a single, substantial policy, you may now need to piece together compensation from multiple sources, each with its own limitations and legal hurdles.

How Other Drivers on the Road Are Affected

The changes also have implications for other drivers, pedestrians, and cyclists who share the road with rideshare vehicles.

• If an Uber/Lyft driver hits you: You are still protected by their $1 million liability policy. Your ability to recover damages in this scenario remains unchanged.
• If an uninsured driver causes a multi-car pileup involving a rideshare: The overall pool of available insurance money has shrunk. Previously, the $1 million UM/UIM policy provided a substantial safety net for those inside the rideshare vehicle. Now, with only $60,000 per person available, there is less money in the system to cover the total damages from a major accident. This shifts more of the financial burden onto the victims and their personal insurance policies.

Why You Need an Experienced Rideshare Attorney at Walch Law More Than Ever

Navigating a rideshare accident claim has always been complicated, but the new law makes it even more challenging. With lower insurance limits and multiple potential sources of recovery, having an experienced personal injury attorney is critical.

The best rideshare accident lawyer can help you by:

• Investigating the Accident: We will immediately work to gather all necessary evidence, including police reports, witness statements, and vehicle data, to establish who was at fault.
• Identifying All Sources of Compensation: We will analyze all applicable insurance policies—from the rideshare company’s policy to your own personal coverage—to maximize your potential recovery.
• Handling All Insurance Negotiations: Insurance companies will look for ways to minimize their payout, especially with lower policy limits. We will handle all communications and negotiate aggressively to ensure you receive a fair settlement.
• Filing a Lawsuit When Necessary: If a fair settlement cannot be reached, we are prepared to take your case to court to fight for the full compensation you deserve for medical bills, lost wages, and pain and suffering and much more.

Take Action to Protect Yourself– Winning California Rideshare Law Firm: Walch Law

The new California rideshare law is a trade-off: potentially lower fares in exchange for greater personal risk. As a rider, it is vital to be proactive. Review your personal auto and health insurance policies to understand your coverage. If you frequently use rideshare services, consider increasing your own UM/UIM limits to create a stronger financial safety net.

If you are injured in an Uber or Lyft accident, do not navigate the new legal landscape alone. Contact the experienced team at Walch Law for a free consultation. We can help you understand your rights and build a strategy to secure the justice and compensation you need to recover. These cases are still worth a lot of money– Contact us now.