A federal judge, in July, blocked a New York City Council law meant to prevent High-Volume For-Hire Vehicle (HVFHV) companiesfromabruptlydeactivatingdrivers, “except in cases of egregious misconduct.” U.S. District Court Judge Gregory Woods issued a preliminary injunction, ruling it unconstitutional, stopping the July 28 scheduled implementation of Local Law 52.
City Council passed the law in December to prevent the potential economic damages that sudden deactivations pose for app-hail drivers – 91% of whom are immigrants and a majority of whom are paying off their vehicles, according to data cited in court papers. In his decision, Woods wrote that the balance of the equities and the public interest is in Uber’s favor. Part of his reasoning, he said, was based on the assessment that only a small group of drivers are affected by wrongful deactivations.
The ruling means that the city will be preliminarily blocked from enforcing the rule as the lawsuit moves forward. Wood concluded that Uber is likely to prevail in its argument that Local Law 52 does not further a significant and legitimate public purpose and that it impedes rideshare companies’ constitutional contractual rights.
The Independent Drivers Guild helped create a process for assessing whether deactivations are done for legitimate reasons. Industry insiders say that while Uber participates in the program, paying into it, Lyft drivers facing a deactivation may be in a precarious position, with no formal appeal process currently.
Queens City Council Member Shekar Krishnan (D-Queens), the law’s sponsor, said that he strongly disagreed with the decision and would continue to fight for due process for app-based drivers. Uber filed its complaint against the city in June, asserting that Local Law 52 violates the Contracts Clause, the Due Process Clause, and the First Amendment of the U.S. Constitution. Lyft later joined the case. Woods found that Uber and Lyft were likely to succeed in their case that the regulation undermines their contracts with drivers and their authority to investigate “deceptive, fraudulent, unsafe, illegal, harmful” conduct. The judge also raised concerns that the bill would impede the companies’ ability to “police the safety of their platforms and their passengers.” Though the bill would still allow Uber and Lyft to deactivate drivers who pose a danger to passengers, Woods objected to the strict five-day timeline requiring the companies to detail the reasons for a temporary deactivation while a complaint is being reviewed. He concluded that the risks to the HVFHV companies and the general public outweighed the risks to the city or what he asserted to be “a very small but undetermined number of drivers.”
Source: amNY
