Governor Gavin Newsom has signed a last-minute legislative agreement between Uber Technologies Inc. (UBER) and California trial attorneys, averting what could have been a messy and expensive ballot measure fight.
The deal, embodied in SB 623, introduces new safety requirements for ride-hailing companies while tightening rules on medical lien practices that Uber says inflate car crash lawsuit payouts and reduce victims' settlements. Think of medical liens as a way for hospitals or private equity firms to claim a chunk of a victim's settlement before the victim sees a dime—Uber argued this was driving up costs and leaving crash victims with less.
Although Uber initially pushed for stricter limits, the agreement does not impose firm caps on attorneys' fees in car crash lawsuits. Following Newsom's signature, both Uber and the Consumer Attorneys of California agreed to withdraw their competing November ballot initiatives. That's a big deal, because the two sides had been waging a months-long TV advertising battle that cost a combined $50 million.
As part of the agreement, Uber will enhance driver background checks and adopt additional safety standards. Trial lawyers say these measures could help prevent sexual assaults and other misconduct. Supporters also argue the deal will prevent private equity firms from profiting off medical debt tied to car crash victims. The California Assembly and Senate overwhelmingly approved the bill before the deadline to remove competing ballot initiatives from the November election.
