California’s rideshare rules changed on January 1, 2026. That is when Senate Bill 371 (SB 371) took effect and reset the insurance requirements Uber and Lyft must follow statewide.
State Senator Christopher Cabaldon authored the bill, and Governor Gavin Newsom signed it in October 2025. Supporters say it will make rides cheaper. Critics say it leaves injured passengers with far less financial protection.
Why Lawmakers Passed SB 371
Rideshare companies argued that insurance costs had become unsustainable. Nearly half of each fare was reportedly going toward premiums tied to the old $1 million policy requirement.
Cabaldon presented the bill as an affordability measure. It was linked to a companion bill, Assembly Bill 1340, and pitched as a win for both passengers and gig drivers.
The promise was simple. Lower insurance obligations would eventually translate into cheaper fares.
How the Rideshare Law Changes Insurance Coverage
The biggest change under the new Uber law in California involves uninsured and underinsured motorist (UM/UIM) coverage. Uber and Lyft previously had to carry $1 million in UM/UIM protection per incident.
Those limits now sit at $60,000 per person and $300,000 per accident. That is a reduction of nearly 70 percent. The impact is easiest to see by breaking rideshare activity into three coverage periods.
Period 1: Driver Is Waiting for a Ride Request
A driver who is logged into the app but has not accepted a trip has limited coverage. It includes $50,000 per person and $100,000 per accident for bodily injury, plus $30,000 for property damage.
Limited UM/UIM coverage may also apply. That matters because most personal auto policies deny claims tied to commercial rideshare activity.
Period 2: Driver Is En Route to Pick Up a Rider
Once a driver accepts a ride and heads to the pickup spot, stronger protections apply. The law now requires a $200,000 excess coverage policy on top of existing limits.
Property damage liability also rose from $25,000 to $30,000. These changes are meant to protect pedestrians, cyclists, and other motorists who share the road with a driver rushing to a pickup.
Period 3: Rider Is in the Vehicle
This is where the most controversial changes sit. Uber and Lyft still carry $1 million in liability coverage if their driver causes a crash while a passenger is in the car.
If another driver causes the accident, though, UM/UIM coverage is now capped at $60,000 per person and $300,000 per accident. That is a steep drop from the $1 million safety net passengers once relied on.
Why the Coverage Cuts Matter for Accident Victims
Serious crashes often generate costs well above $100,000. That total can include emergency treatment, ongoing rehabilitation, lost income, and long-term care.
Under the new caps, an injured rider may be left responsible for costs that used to be covered. The risk grows because California has one of the highest rates of uninsured drivers in the country. Roughly one in eight motorists is on the road without coverage.
What the Law Means for Rideshare Drivers
The law is not only about insurance. It also gives drivers new tools for collective advocacy while keeping their independent contractor status.
Drivers gain access to a statewide bargaining system and group negotiations over pay and benefits. They also get a formal process for reviewing deactivation decisions. Mediation and arbitration options are available to help resolve disputes with rideshare companies.
The Debate Over Attorney Fees
During legislative hearings, rideshare companies argued that personal injury attorneys were inflating claims and encouraging unnecessary medical treatment. One proposed fix would have capped attorney fees at 25 percent, well below the typical 33 to 40 percent contingency rate.
Consumer advocacy groups pushed back. They say a cap could make many cases financially unworkable, forcing injured people to represent themselves or abandon valid claims.
The Consumer Attorneys of California and similar groups also warn that the approach shifts financial risk from large corporations to injured passengers.
What Could Come Next
A coalition led by consumer attorney groups is working on counter-ballot measures for November 2026. The proposals would aim to add stronger consumer protections, address inflated medical billing, and create new safeguards specific to rideshare.
The fight echoes the political battle over Proposition 22 in 2020, which affirmed the independent contractor status of rideshare drivers.
Steps to Take After a Rideshare Accident
If you are involved in an Uber or Lyft crash, a few steps can protect your health and your claim.
Get medical care right away. Some injuries, such as brain trauma or internal bleeding, do not show symptoms immediately.
Document everything. Save your ride receipt, the driver’s details, photos of the scene, and any visible injuries.
Talk to an experienced Uber accident attorney before accepting any settlement. Insurers often open with low offers, and accepting one can prevent you from seeking more compensation later.
How an Experienced Attorney Can Help
The layers of insurance created by this law are not simple to sort out. Rideshare liability policies, reduced UM/UIM limits, personal auto coverage, and health insurance can all come into play. Many victims are unsure where to turn for compensation.
A local rideshare accident law firm can identify every available source of recovery. That includes the new Period 2 excess policy and any gaps left by the reduced Period 3 UM/UIM limits. A lawyer can also negotiate with insurers to push back against lowball offers.
If you were hurt in a rideshare accident, you do not have to face these new rules alone. Speaking with a qualified attorney early can protect your rights and strengthen your claim from the start.