Analysis of the Economic Effects of NY VTL Article 44-B

A new economic analysis by BRG finds that New York’s $1.25 million uninsured/underinsured motorist (UM/UIM) coverage requirement for Transportation Network Companies (TNCs) when en route to/from and transporting passengers significantly exceeds what is necessary in most accident scenarios—raising costs for riders and limiting earnings for drivers across the state. Drawing on real-world insurance data and economic modeling, the study concludes that a more targeted, data-driven standard could preserve strong consumer protections while materially improving affordability and access to transportation.

The study comes as Governor Kathy Hochul has put forward proposals to bring down the cost of auto insurance for New Yorkers, including common-sense reforms to tackle insurance fraud and limit excessive damages—steps that align with the broader case for right sizing TNC insurance mandates.

Key Findings from the Report

• New York’s mandated coverage significantly exceeds what most accidents require: According to data provided by Uber’s insurance partner in New York, excluding New York City, the vast majority of personal (non-TNC) UM/UIM claims in the state resolve well below $100,000, and most TNC UM/UIM claims settle under $25,000 per person ($50,000 per accident).
• New York’s UM/UIM mandate is duplicative of existing, more generous protections: New York is one of the most comprehensively insured states in the country for accident victims—well before UM/UIM coverage comes into play. As a no-fault state, New York mandates up to $50,000 in Personal Injury Protection (PIP) insurance to every driver, passenger, and pedestrian involved in an accident, regardless of fault. In addition, TNC drivers benefit from the Black Car Fund, which provides workers’ compensation insurance covering up to two-thirds of a driver’s average weekly wage along with extensive medical benefits. Because PIP pays out first—before any UM/UIM coverage would apply—the report finds that no accidents are likely to result in UM/UIM coverage serving as the sole means of financial recovery. These overlapping layers of protection mean that New York’s $1.25 million UM/UIM mandate provides little incremental benefit to riders or drivers, while substantially driving up costs for both.
• Current requirements increase transportation costs: Elevated insurance costs resulting from the mandate are passed along in the form of higher fares for riders and reduce earning opportunities for drivers. According to Uber, on average, about 27% of the typical TNC rider fare in New York goes toward government-mandated insurance, with approximately 11% attributable to UM/UIM coverage, as of December 2025. In comparison, in places like Washington, DC and Massachusetts—which have much lower UM/UIM coverage requirements—less than 5% of riders’ fares go to mandatory insurance costs.
• Excessive coverage fuels litigation and inflated claims: BRG’s empirical analysis shows that New York’s excessive coverage makes TNCs a target for increased litigation. The losses incurred under TNC’s UM/UIM coverage in New York are substantially higher than in comparable states with lower UM/UIM policy limits, like Connecticut and Illinois, and states with lower limits have fewer claims proceed to litigation.
• Reducing costs would improve affordability and access: A more economically efficient coverage requirement would meaningfully reduce costs for riders. Economic modeling in the study suggests that cutting UM/UIM-related insurance costs in half potentially could generate around 8.1 million additional rides annually in New York (excluding New York City), based on estimated 2025 ridership of approximately 45 million Uber trips and 30 million Lyft trips. The increase in trips would directly correlate to increased earning opportunities for New York TNC drivers.
• Lower coverage could deliver public benefits: Increased TNC usage is associated with better transportation access and can contribute to improved roadway safety. Research cited in the study shows that expanded TNC availability helps reduce impaired driving and traffic fatalities.

“New York’s 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 exceeds what is needed to fairly compensate accident victims. New York has low rates of uninsured motorists and is one of the safest states in which to drive—yet it mandates among the highest TNC insurance coverage in the country. A more balanced, data-driven approach would preserve strong protections while making transportation more affordable for millions of New Yorkers.”

The study draws on real-world data from rideshare companies and comparisons between New York and similar states. The authors find no statistical evidence that reducing UM/UIM coverage to $25,000 per person ($50,000 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.

Governor Hochul recently announced proposals to address the high cost of auto insurance in New York, including reforms to crack down on fraud, limit damages for bad actors, and reduce the burden on New Yorkers. New Yorkers pay some of the highest car insurance rates in the nation—over $4,000 annually on average, nearly $1,500 above the national average. BRG’s analysis underscores that rightsizing the TNC insurance mandate would represent a concrete opportunity to reduce costs for consumers and drivers across the state.

The authors were retained by Uber Technologies Inc. and Lyft Inc. to conduct an economic impact study of New York State Vehicle and Traffic Law (VTL) Article 44-B 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.