The Trial Lawyer Tax on Your Ride Share Trips

As Americans increasingly worry about affordability, Congress has an opportunity to do something to lower transportation costs. An amendment from Rep. Vince Fong to the House surface transportation reauthorization bill would address a hidden tax that millions of Americans pay every day: the cost of frivolous litigation against rideshare companies. 

If passed into law, the provision would prevent claims against rideshare and delivery companies based on expansive legal theories around “vicarious liability.” Currently, plaintiffs can seek damages from a rideshare company simply because a driver was using its platform at the time of an incident — without claiming the company itself hired negligently, trained negligently, or violated any safety laws.

Fong’s amendment is a sensible attempt to rein in bad actors as America’s lawsuit culture spirals out of control. Legal services attorneys spent an estimated $2.5 billion on advertising in 2024, a nearly 40 percent increase from 2020. That advertising is fueling a litigation industry that undermines innovation and raises costs for industries like ride sharing and delivery. 

The result is hundreds of millions of dollars in unnecessary costs, ultimately paid by the consumers who use these services. Insurance is one of the biggest operating expenses for rideshare and delivery companies. When litigation exposure expands beyond a company’s own conduct, those costs ultimately mean reduced earnings for drivers and less-affordable transportation for people who depend on it. 

In some cases, the hunt for insurance payouts has crossed into outright fraud. Earlier this year, Uber and Liberty Mutual sued a New York fraud ring that allegedly staged auto accidents, submitted fake injury claims, and exploited the state’s no-fault insurance system for payouts. New York Governor Kathy Hochul has cited insurance fraud as a major driver of rising insurance costs, with state insurers reporting more than 38,000 suspected cases of auto-insurance fraud in a single year, driving insurance premiums and transportation costs higher.

Congress already acted to limit liability in other areas of the auto industry. In 2005, lawmakers passed the Graves Amendment to stop abusive lawsuits against rental car companies based solely on vehicle ownership. Congress concluded that companies should be liable for their own negligence and misconduct, but not automatically liable for conduct outside their control.

The provision in the current surface transportation bill extends that logic, applying the same commonsense principle to today’s transportation economy. While limiting vicarious liability claims, the language ensures that companies remain fully liable in cases of their own negligence. Ride share companies would still have to maintain insurance coverage, conduct driver screening, comply with safety requirements, and follow federal and state law. The amendment simply links liability with actual fault, ensuring companies are responsible for their own negligence rather than automatically assuming liability just because a driver used their platform.

By incorporating this amendment to the surface transportation bill, Congress will prevent frivolous litigation from siphoning money away from consumers, drivers, and innovation. Millions of Americans rely on rideshare services to get to work, reach medical appointments, catch flights, and travel safely. Millions more use app-based delivery services. These services succeed because technology has made transportation more convenient, more flexible, and often more affordable. Congress should prioritize legislation to encourage that progress. 

Americans want lower prices, not more lawsuits. The House Transportation and Infrastructure Committee has already approved this provision and acted to prevent plaintiffs’ attorneys from targeting rideshare companies and the millions of Americans who use their services. Congress should keep this pro-consumer provision in the final bill and send it to the President’s desk.

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