Uber New Law in California

California’s rideshare landscape underwent a dramatic transformation on January 1, 2026, when Senate Bill 371 (SB 371) took effect. This controversial legislation, authored by State Senator Christopher Cabaldon and signed by Governor Gavin Newsom in October 2025, altered insurance requirements for transportation network companies like Uber and Lyft.

While proponents argue the new California law lowers costs for rides, consumer advocates warn it significantly undermines efforts to protect auto accident victims–for both riders and other involved drivers. By altering the póliza de seguro $1 millón liability requirements, SB 371 may affect your next ride in the following ways.

How Uber’s New 2026 Laws Will Affect California Passengers

What Rideshare Accident Victims Need to Know About California Senate Bill 371

Senate Bill 371 represents a comprehensive overhaul of insurance requirements for transportation network companies (TNCs) and gig companies operating in California. The legislation emerged from negotiations between Governor Newsom, legislative leaders, rideshare companies, and labor unions as part of a larger compromise package.

El insurance reform package tied to Assembly Bill 1340 includes major changes to rideshare insurance rules through SB 371, which aims to lower operational costs for companies while keeping fares more affordable for the public.

The two bills were presented to benefit both Uber and Lyft passengers, as well as gig rideshare drivers.

What Is Gavin Newsom’s California Senate Bill 371?

According to Senator Cabaldon, the goal was to address affordability concerns regarding rideshare services by delivering real solutions.

However, rideshare companies argued that excessive insurance costs created a domino effect by driving up operational costs, with nearly half of each Los Angeles fare going toward government-mandated insurance premiums (i.e., Uber and Lyft’s $1 million policy).

By lowering insurance costs, supporters claimed the savings would be passed on to consumers through reduced fares while still maintaining adequate protections.

How SB 371 Changes Rideshare Liability Insurance Coverage

The primary change under SB 371 involves uninsured and underinsured motorist (UM/UIM) coverage. Previously, California law required Uber and Lyft to maintain $1 million in UM/UIM coverage per incident to protect passengers in accidents with non-insured drivers. Under the new law, this requirement has been slashed to just $60,000 per individual and $300,000 per accident, a nearly 70% reduction.

Understanding the new insurance structure under SB 371 requires familiarity with the three distinct “periods” of rideshare activity, each carrying different coverage levels.

Period 1: App On, Waiting for Ride Request

The same policies still apply during period 1, which states that if an Uber or Lyft driver is logged in but has not yet accepted a ride. Limited coverage of $50,000 per person, $100,000 per accident for bodily injury liability, and $30,000 for property damage liability still applies.

Limited UM/UIM coverage is also available if the at-fault driver is insufficiently or entirely uninsured or if the driver’s personal insurance denies the claim, as most personal policies do for commercial rideshare activity.

Period 2: Ride Accepted / Rideshare Driver en Route

This period begins when a driver is actively logged into the app, accepts a ride request, and is en route to pick up a passenger. The law now mandates:

$200,000 excess coverage policy in addition to existing limits
A property damage increase from $25,000 to $30,000 per incident

Uber and Lyft’s $1 million policy and UM/UIM coverage may still apply. These changes aim to protect pedestrians, cyclists, and other motorists who may be struck by Uber or Lyft drivers rushing to pick up passengers.

Period 3: Rider Is Present in Uber/Lyft Driver’s Vehicle

This period is the most significant and controversial change in the updated rideshare laws. When a driver is actively transporting a passenger, Uber and Lyft still carry $1 million in third-party liability coverage if the driver is at fault for an accident. However, the major modification focuses on UM/UIM coverage.

Previously, when the Uber/Lyft driver caused the accident:

$1 million in primary liability insurance once a ride was accepted or in progress
$1 million in UM/UIM coverage

Now, when another driver causes an accident:

UM/UIM coverage now capped at $60,000 per person
Maximum of $300,000 per accident

This represents a drastic reduction from the previous one-million-dollar safety net that protected passengers in catastrophic injury situations.

The Impact on Accident Victims (Riders and Other Drivers)

The reduction in UM/UIM coverage creates significant financial challenges for rideshare accident victims, particularly those suffering severe injuries, as they will be left paying for the remaining balance once the other driver’s insurance coverage maxes out.

Motor vehicle accident-related costs frequently exceed $100,000, far surpassing the new $60,000 coverage limit, often including:

Emergency treatment and hospitalization
Inflated medical billing
Future medical costs (rehabilitation, corrective surgery, etc.)
Lost wages during recovery
Long-term care needs
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The Impact On Uber and Lyft Drivers

The new bill creates stronger voices for Lyft and Uber drivers by advocating for better wages and safer working conditions, while preserving their independent contractor status. Key elements of this legislation include:

Collective Advocacy: Drivers can participate in a statewide bargaining system.
Negotiated Terms: Group negotiations may be used to determine pay rates and benefit programs.
Deactivation Review: New options for reviewing deactivation decisions may be available.
Safety and Training: Discussions can cover safety standards and training expectations.
Dispute Resolution: Mediation or arbitration services are available to help resolve disagreements between drivers and the companies.

These reforms aim to provide drivers in the rideshare industry with increased stability and a fairer process for addressing common concerns.

The Controversy Behind SB 371

SB 371 emerged amid intense political and legal battles over rideshare liability and safety once attorneys got involved. Rideshare companies justified the legislation by pointing to what they characterized as excessive insurance costs and litigation abuse.

During Senate hearings, Uber and Lyft representatives focused attention on the legal system, accusing personal injury attorneys of inflating claims by encouraging claimants to undergo unnecessary medical procedures.

The proposed solution is to cap attorney fees at 25% in personal injury cases, rather than the average of 33% to 40% when attorney fees are billed on contingency (comes from the client’s final awarded compensation after fees)

Consumer advocacy organizations have pushed back aggressively, arguing that Uber’s corporate track record, which includes federal class actions over sexual assault allegations and FTC lawsuits for deceptive billing practices, raises legitimate questions about corporate accountability. Other concerns include:

The 25% cap makes cases economically unfeasible for attorneys
Lawyers would need to cover medical costs upfront
Could result in attorneys walking away with nothing
Would prevent injured victims from seeking compensation in court

Greater Consequences for Injured Victims

Consumer attorneys and advocacy groups, including the Consumer Attorneys of California (CAOC), argue that SB 371 shifts financial risk from billion-dollar corporations to vulnerable passengers, highlighting:

California ranks eighth in the nation for the highest rate of uninsured drivers
Approximately one in eight drivers operates without insurance

When the average driver who is not insured causes accidents, victims now face severe coverage gaps and must rely on personal health insurance, auto insurance, and out-of-pocket funds to cover medical expenses and other accident-related damages, leaving them in an unfair position and potentially leading to bankruptcy.

The Ongoing 2026 Ballot Measures in the Foreseeable Future

The Consumer Attorneys of California is currently leading a coalition promoting counter-ballot measures for November 2026, which would include:

Additional consumer safeguards that prioritize victims’ safety
Ending inflated medical billing by limiting attorney fee structures
Sexual assault liability protections
Future regulations for the rideshare industry

This battle echoes the $200 million campaign around Proposition 22 in 2020, which upheld contractor status for rideshare workers.

3 Things Accident Victims Need To Do After a Crash

With new California policies in place and more changes on the horizon, it’s vital to still take certain precautions after an Uber or Lyft accident.

1. Seek Immediate Medical Attention

First, seek medical attention immediately, even if injuries appear minor. Some serious conditions, including traumatic brain injuries (TBIs), internal bleeding, spinal cord damage, or soft tissue injuries, may not manifest symptoms for hours or days. Early medical intervention improves recovery rates and establishes medical documentation linking injuries to the accident.

2. Preserve All Available Evidence

Document everything that will help demonstrate the severity of the crash:

Screenshot and save the ride receipt and trip details
Record driver information, like name, contact number, and insurance information
Photograph and video record the accident scene, vehicle damage, and visible injuries
Capture road conditions and lighting

Evidence is crucial to establishing fault and proving damages when filing a Lyft/Uber accident claim.

3. Consult With an Attorney Before Speaking with the Insurance Company

Uber accident settlements will always vary, depending on the severity of the crash and damages. Therefore, before accepting a settlement for an Uber or Lyft accident, consult with an experienced rideshare accident attorney.

Initial offers from insurance companies are often low, and accepting one waives the right to pursue additional damages, even if injuries worsen and medical bills increase. Qualified legal representation ensures all potential coverage, including the new Period 2 excess policy and personal insurance, is identified.

Understanding the New Insurance Reform and How It Affects Victims’ Rights

An experienced rideshare accident attorney assists clients in securing compensation from various sources, especially if the new Period 3 policy for uninsured/underinsured motorist coverage is inadequate. Potential sources include:

Rideshare Company’s Insurance

UM/UIM policy (now $60,000/$300,000)
Liability policy ($1 million, if the rideshare driver is at fault)

Your Personal Insurance

Your own auto insurance’s UM/UIM coverage, which can be layered on top of other applicable policies (e.g., at-fault drivers, Uber or Lyft).

Other Available Benefits

Health insurance, to cover medical expenses.
Disability insurance, to cover lost wages.

What Rideshare Riders and Other Drivers Can Do to Protect Themselves

For now, rideshare passengers must navigate this new reality with heightened awareness. It is beneficial to consider these protective measures.

Review your personal auto insurance UM/UIM limits
Consider increasing your coverage if you frequently use rideshare services
Keep detailed records of everything pertaining to the accident, whether as a passenger or another driver

As this legal landscape continues to shift, consulting with qualified legal professionals who specialize in rideshare accidents remains the most effective way to protect your interests.

Conclusion: Reviewing the Current Legal Landscape of the Rideshare Industry

California’s rideshare insurance landscape has become significantly more complex under the new bill. Here is the most recent data moving forward.

What Remains Protected

$1 million liability coverage when rideshare drivers cause accidents
Maintain occupational accident coverage.
Period 2 excess coverage of $200,000 for pedestrians and other drivers
Mandatory insurance disclosure requirements

What Has Changed

Dramatic reduction in UM/UIM protection for passengers
Greater financial vulnerability when uninsured drivers cause accidents
Increased importance of personal insurance coverage

If you were injured in a rideshare accident or have concerns about your rights as a passenger or driver, legal guidance can make a difference. At Abogado Jeff, abogado de accidentes automovilísticos, we support clients throughout the legal process. Schedule a free consultation with our California Uber and Lyft accident lawyers to discover how we can strengthen your claim and secure the compensation you deserve.

Written By

Michelle Jaco

A content strategist and copywriter based in Orange County, she possesses over ten years of professional writing experience. A graduate of San Diego State University with a B.A. in English, she specializes in building brand identity and enhancing reader engagement, with expertise spanning legal content, software startup copy, and lifestyle branding. When she is not writing in her favorite coffee shop, Michelle is typically traveling, running along the beach, and indulging her sports fandom by cheering on the Kansas City Chiefs and Los Angeles Dodgers (she maintains that she is not a bandwagoner).