Uber bans most under 25s from driving for the company in California because of rising insurance costs

Tom Carter
·2 min read
6

  • Uber has banned under-25s from working as drivers in California because of rising insurance costs.

  • This ban does not impact the under-25s who are already driving for Uber.

  • Car insurance is generally more expensive for younger or newer drivers with less experience.

People aged under 25 in California will no longer be allowed to work as Uber drivers after the ride-sharing giant changed its age limits, according to a report from the AP.

In a statement to Insider, Uber said its commercial auto insurance costs had risen by more than half in the last two years. It said this is because insurance rates for its Californian drivers are significantly higher than other taxi drivers and people driving vehicles for personal use. It also said personal injury lawyers were driving costs up by suing the company.

"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," the spokesperson said.

Uber confirmed that it will allow under-25s who are currently signed up to transport passengers to continue driving for the company.

The change in the rules also reportedly does not extend to couriers delivering food for Uber Eats, the age limit for which is 19. Uber had previously allowed users as young as 21 to sign up to drive passengers.

"By increasing the age requirement for new drivers to 25, we hope to mitigate the growth of those costs," it said, referring to insurance expenses.

Car insurance is generally more expensive for younger or newer drivers with less experience. Insider reached out to Uber for further comment but didn't immediately hear back.

The move comes after a surge in passenger demand helped Uber finally succeed in its long quest for profitability. The company recorded its first-ever operating profit of $326 million earlier this month during its most recent quarter, swinging from a loss of $713 million in the same period the year before.

The company has slashed hundreds of jobs this year as it seeks further growth, cutting around 3% of staff across its human resources, freight, and food-delivery divisions.

The ride-sharing giant also won another victory in its battle to treat drivers as independent contractors rather than employees. In March, a California appeals court allowed the company and its rivals to continue doing so, overturning a previous decision by a lower court.

Read the original article on Business Insider