In June, Lyft joined Uber in a lawsuit in Manhattan federal court against New York City to block a new law they say will force them to keep bad drivers who threaten public and passenger safety on their platforms. Both companies are challenging Local Law 52 of 2026, which is meant to prevent large app-hail companies from swiftly dismissing drivers absent a “bona fide economic reason” or “just cause” by allowing them to request an investigation by the Department of Consumer and Worker Protection.
The companies say the law targeting “wrongful deactivations” violates their due process and free speech rights under the U.S. Constitution. They also said the law threatens irreparable harm by undermining their reputation and goodwill while keeping unsafe drivers (including those accused of sexual misconduct) on the road.
The law is meant to take effect on July 28, after the City Council overwhelmingly overrode former Mayor Eric Adams’ veto in January.
Lyft and Uber have both objected to requirements forcing them to give drivers 14 days’ notice before letting them go and potentially rehiring drivers deactivated since 2019 because they did not receive such notice. The companies also objected on privacy grounds over the requirement of passengers to detail alleged misconduct to accused drivers, and a heightened burden of proof required when defending against drivers who challenge their deactivations in court or arbitration.
According to Uber’s lawsuit, the company would be forced to keep drivers on their platforms, even if it has been determined that they’ve violated their standards, agreements, and policies. If the measure takes effect, “it will permanently impair Uber’s contracts, compel the communication and disclosure of sensitive and protected information that Uber would not otherwise provide, force at least temporary association with drivers whom Uber would otherwise deactivate, subject Uber to an unfair and lopsided adjudicative process, and potentially lead to reputational harm and a loss of business and goodwill,” the lawsuit added.
The suit alleges that requiring drivers to be provided with information and data relevant to their deactivation – including all customer comments, ratings, and complaints – “would be detrimental to rider safety and to both rider and driver privacy… and would also give fraudsters an upper hand in evading detection.”
Once the law takes effect, all of the more than 12,000 New York City drivers deactivated since July 2019 can petition Uber for reinstatement, according to the complaint. Uber says it will be required to “expend enormous resources” to re-investigate and respond to thousands of deactivations, “each of which took place when Uber had no inkling that it had to retain the relevant documents and information, and then in seven years it might be required to justify the deactivation with evidence.”
Sources: MSN, Bloomberg Government
