Uber sues New York City over new driver deactivation law

A New York City law set to take effect on July 28 would change the power balance between ride-hailing platforms and drivers by limiting when Uber and Lyft can cut people off. Under Local Law 52 of 2026, high-volume for-hire vehicle services generally could not deactivate a driver unless they can show just cause or a bona fide economic reason, and they would have to provide notice and an appeal process through the Department of Consumer and Worker Protection in non-egregious cases.

The law still leaves room for removals over account sharing, fraud, violence, sexual harassment, assault, discrimination and other serious misconduct. But for thousands of drivers, it would replace the current fear of instant removal with a procedure that looks far closer to a workplace discipline system than a platform policy. Supporters say that matters in a city where the New York Taxi Workers Alliance represents about 21,000 cab and app-dispatched drivers, and where the measure was described as protection for nearly 100,000 Uber and Lyft drivers.

Uber answered with a federal lawsuit filed June 10 in Manhattan, asking a judge to stop the law before it takes effect. In its complaint, Uber argued that the city cannot force it to keep drivers it does not want on the platform, and said the measure violates free-speech and due-process protections under the U.S. Constitution and New York’s state constitution. The company also objected to the law’s 14-day notice requirement in non-egregious cases, saying that it could expose passengers to retaliation and force Uber to retain drivers it no longer trusts.

The company went further, arguing that the deactivation rules could shield people who engaged in dangerous or threatening behavior and create an immediate threat to public safety. Uber also said the law could require disclosure of complaints or abuse reports to accused drivers, and that it creates a system in which judges, arbitrators and city officials are asked to presume deactivations are unjust.

The clash followed a bruising city fight over worker protections. The measure, introduced as Int. 0276 and enacted as Local Law 52 of 2026 on January 29, passed the City Council by a 46-5 vote after former Mayor Eric Adams vetoed an earlier version and the council overrode him. The sponsors included Shekar Krishnan, Shahana K. Hanif, Linda Lee, Lincoln Restler, Christopher Marte, Gale A. Brewer, Crystal Hudson and Tiffany L. Cabán, with Speaker Julie Menin backing the law as a due-process safeguard for workers.

New York City’s Law Department said it is reviewing the complaint. The broader test now is whether a city can require gig platforms to justify deactivations before they happen, or whether app companies will keep the right to remove workers first and explain later. That question is likely to echo far beyond New York.