Analysis of the Economic Effects of New Jersey Statute 39:5H-10 on New Jersey Stakeholders

Insurance coverage currently makes up more than 30 percent of the rideshare fare on average; right-sizing UM/UIM coverage mandates could make transportation more affordable and efficient.

A new economic analysis by BRG examines the impact of New Jersey Statute 39:5H-10, which mandates $1.5 million in uninsured/underinsured motorist (UM/UIM) coverage for transportation network companies (TNCs) such as Uber and Lyft. The study finds that this requirement far exceeds what is necessary in many accident scenarios, driving up costs for riders and lowering earnings for drivers.

The report also finds that a practical, recalibrated approach to coverage levels would maintain strong protections for riders and drivers while improving affordability and access to transportation across the state.

Key Findings from the Report

• New Jersey’s mandated coverage significantly exceeds what most accidents require: According to data provided by Uber and Lyft’s insurance partner in New Jersey, more than 98 percent of personal (i.e., non-TNC) UM/UIM claims close below $100,000 for policies that have $50,000/$100,000 limits in New Jersey.
• Current requirements increase transportation costs: Elevated insurance costs resulting from the mandate are passed along in the form of higher fares for riders and reduced earning opportunities for drivers. BRG’s analysis finds that more than 30 percent of a typical rideshare fare in New Jersey goes toward government-mandated insurance, with roughly half of that specifically attributable to UM/UIM coverage.
• Reducing costs would improve affordability and access: A more efficient coverage requirement could meaningfully reduce costs for riders. Economic modeling in the study suggests that cutting UM/UIM-related insurance costs in half could potentially generate nearly seven million additional rides annually across New Jersey. The increase in trips would directly correlate to increased earning opportunities for New Jersey rideshare drivers.
• Lower coverage could deliver public benefits: Increased rideshare usage is associated with better transportation access and can contribute to improved roadway safety. Research cited in the study shows that expanded rideshare availability helps reduce impaired driving and traffic fatalities.

“New Jersey’s current rideshare insurance mandate is an outlier compared to states with similar safety profiles,” said Paul Wazzan, PhD, one of the report’s authors. “The evidence clearly shows that the coverage level far exceeds what is needed to fairly compensate accident victims. A more balanced, data-driven approach would preserve strong protections while making transportation more affordable for millions of New Jerseyans.”

The study draws on real-world data from rideshare companies, comparisons between New Jersey and similar states, and detailed economic modeling. The authors find no statistical evidence that reducing UM/UIM coverage to $35,000 per person ($70,000 per accident), the state mandate for personal vehicles, would expose riders or drivers to unreasonable financial risk. Instead, the analysis highlights opportunities for policy recalibration that would better align insurance requirements with actual risk and economic efficiency.

The authors were retained by Uber Technologies Inc. and Lyft, Inc. to conduct an economic impact study of New Jersey Statute 39:5H-10 and were provided with data for empirical analysis by Uber and Lyft. The authors had independent access to data that Uber and Lyft provided to the authors, and neither Uber nor Lyft was provided access to data provided by the other company at any time. Appendix B contains a description of this data.