Uber announced it has raised the minimum age requirement Thursday for most new drivers in California because its insurance costs there have leaped by "more than 65% in just two years."
The new rule applies to drivers signing up with its ride-hailing service, which used to have a minimum age requirement of 19, and does not impact the Uber Eats platform, according to The Associated Press.
In California, "insurance coverage requirements for rideshare are baselessly higher than nearly every other car on the road: up to 30 times that of taxis and 30 times that of personal vehicles," an Uber spokesperson told FOX Business in a statement.
"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 statement continued. "By increasing the age requirement for new drivers to 25, we hope to mitigate the growth of those costs."
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On its website, Uber says, "When you're online with Uber, we maintain auto insurance on your behalf.
"Leading auto insurance providers help protect you and your riders in the event of a covered accident," it adds.
While en route to pick up riders and during trips, Uber says it offers "$1,000,000 third-party liability" coverage.
While not using the driver app, Uber says, "Your chosen personal insurance company and coverages apply."
Those under 25 years old who have activated their ride-sharing accounts prior to Wednesday can still drive for Uber in California, the AP reports.
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"We hope to work with lawmakers, policy leaders, and industry experts to discuss legislative and regulatory changes that will improve the experience for all California drivers," the Uber spokesperson also said.
Its competitor, Lyft, says on its website, "The minimum age requirement to drive with Lyft ranges from 21–25 and varies by region."
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Uber CEO Dara Khosrowshahi said in early August, "Robust demand, new growth initiatives, and continued cost discipline resulted in an excellent quarter, with trips up 22% and a GAAP operating profit, for the first time in Uber’s history."
FOX Business’ Joe Toppe contributed to this report.
