Uber charges riders a fee for insurance and operations — and it’s harder to predict than the price you’ll pay for the overall trip, a new study suggests.
Len Sherman, an executive in residence and adjunct professor at Columbia Business School, analyzed 120 Uber Reserve trips completed by one driver between Ithaca, New York, and an airport in Syracuse over a two-year period.
The trips were similar in several ways, Sherman said. Each was driven by the same driver in the same Tesla Model Y. Each also followed essentially the same route along the freeway, covered nearly identical distances, and began and ended at similar locations.
Across the roughly 60-mile trips, Uber’s reported commercial auto insurance and operational charge on each ride ranged from $13.75 to $50 — an interesting result, Sherman said, given how similar the trips were from a risk standpoint.
“When you have identical trips by the same driver, the same car, and the same route in the same distance, there should not be a much higher variation in what you say your commercial insurance costs are,” Sherman told Business Insider.
An Uber spokesperson told Business Insider that the fee covers government-mandated insurance for rides.
The fee can vary due to multiple factors, “including the trip’s origin city and distance, duration, time of day, and weather, and is included in the price you see in the Uber app before requesting a ride,” the spokesperson said.
Insurance accounts for one-fifth of the average ride-hailing fare
Uber has long said that rider prices and driver earnings can change based on demand. The variation in insurance and operational fees in the study, though, was “twice as high as the variance in price, pay,” or the share of each fare that Uber keeps, Sherman said.
Uber says it relies on a mix of third-party insurance and self-insurance — setting aside cash to cover potential accidents or other claims — in its ride-hailing business.
Ride-hailing drivers can see how much Uber charges for insurance and operations on each ride by going into the details on a trip and in their weekly earnings roundups.
Uber says in the breakdown that the insurance and operational fee is an estimate and “does not reflect insurance expenses incurred on individual trips but goes toward overall insurance and operational expenses,” according to screenshots of such roundups seen by Business Insider. It does not detail what counts as an operational expense.
On average, about 21% of each rider’s fare on Uber and Lyft goes toward insurance costs, according to a study released this week by Gridwise, a platform that helps gig workers track their earnings.
About 53% goes to the driver, while 15% goes to the app. Gridwise analyzed data from trips completed during the first quarter of 2026.
Insurance costs for ride-hailing companies are falling in some parts of the US, Gridwise found.
In the Western US, for instance, the amount of a fare that ride-hailing companies set aside for insurance fell nearly 21% between the first quarter of 2025 and the same period in 2026, according to Gridwise. The savings came after California reduced insurance requirements at the start of 2026, Gridwise said.
Over the same period, ride-hailing companies raised platform fees and cut some rider prices, while raising driver pay 1.2% on average, said Brandon Sellers, Gridwise’s vice president of marketing.
“Very, very, very little of that went to driver pay,” Sellers said.
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