If your Uber rides in New Jersey have felt more expensive recently, you’re not alone. An outsized chunk of every fare — nearly one third — is now going directly to pay for an excessive, government-mandated insurance requirement.
A new independent study from economic consulting firm Berkeley Research Group (BRG) reveals that New Jersey’s rideshare trips are forced to carry 30x more insurance coverage than the average driver, and that policy choice pushes up costs for everyone in the state.
The study points to a law that mandates rideshare companies carry $1.5 million in Uninsured/Underinsured Motorist (UM/UIM) coverage for every trip — coverage that protects riders and drivers if they are in an accident where the fault lies with the other driver, and that driver is not carrying adequate insurance. While that protection is important, the $1.5 million level is an extreme outlier, and the data shows it’s creating a cascade of negative effects for riders and drivers alike.
1. New Jersey’s Mandate is a Massive National Outlier
New Jersey’s $1.5 million UM/UIM mandate is the highest of any state in the nation, with no clear justification. Nationally, 40 states require TNCs to maintain no more than $100,000 in UM/UIM coverage, if they require it at all. Only a few outliers — Delaware, New Jersey, New York, Vermont, and the city of Portland (Oregon) — mandate $1 million or more of this coverage, resulting in significantly higher trip costs. When you compare New Jersey to other states with similar driving and safety metrics, like Illinois and Connecticut, the disparity is clear. New Jersey’s UM/ UIM requirement is 30 times higher than the $50,000 required in Illinois and Connecticut.
2. The Mandate Isn’t Justified by Local Risk
You might assume this high mandate exists because New Jersey is an especially dangerous place to drive, or because New Jersey has more uninsured motorists. The data show the opposite.
New Jersey is actually one of the safest states for drivers: Its traffic fatality rate is significantly below the national average, and its share of uninsured motorists is roughly at the U.S. median.
The BRG study finds no statistical basis for New Jersey’s UM/UIM insurance mandate being so much higher than every other state.
3. New Jersey’s Mandate Drives Up Costs for Riders and Drivers
The economic impact of this policy is clear: riders pay more and drivers earn less. In September 2025, 32% of every New Jersey Uber trip fare, on average, goes directly to the cost of mandatory insurance, and UM/UIM accounts for almost half of that. In states with far lower UM/UIM requirements, such as Washington, DC and Massachusetts, 5% or less of each fare goes to mandatory insurance costs.
When trips become less affordable for riders, drivers see reduced demand for rides, and ultimately lower earnings. Nearly a third of Uber trips in New Jersey start or end in lower income areas, and higher insurance costs make essential trips less affordable. Further, riders who might have once opted to use rideshare during a night out may instead decide to drive when faced with the increased cost, potentially creating less safe streets.
A Common-Sense Path Forward
There’s a common-sense solution: recalibrating the TNC UM/UIM mandate to align with New Jersey’s own standard for personal auto insurance, which will be $35,000 per individual ($70,000 per accident) as of January 2026.
This change would preserve robust and appropriate protection for riders and drivers. Lowering the cost of insurance means lower fares for riders and more trips for drivers. Increased rideshare use has also been linked to improved public safety including fewer traffic fatalities. It’s a win for riders, a win for drivers, and a win for public safety in New Jersey.
To learn more about the economic impact analysis, the full study was conducted by Paul Wazzan, Jeffrey Klenk, Helmut Klemperer, and William Hamm of Berkeley Research Group (BRG).
For more info on the insurance coverages provided by Uber, see here.