NEW YORK – New York City is in court defending its decision to force Uber and Lyft to prove why they deactivate their drivers, arguing for a new law’s “positive impact” on workers who had their income harmed by false reviews from riders.
The two ride-share companies targeted by Local Law 52, adopted in January and set to start on July 28, have sued to block implementation of the law, as has a Brooklyn man concerned more drivers means more safety issues.
Though former mayor Eric Adams opposed the measure, his successor Zohran Mamdani felt differently. LL52 requires Uber and Lyft to show the City that deactivation of a driver was for a “bona fide economic reason” but allows them to immediately act against drivers when there are egregious public safety concerns.
“Studies and anecdotal accounts show that for years, Drivers have lost their livelihoods because of deactivations with no prior notice, insufficient evidence, and sometimes, based on discriminatory or false reviews from riders,” a motion to dismiss filed June 25 says.
“LL52 will have a positive impact on thousands of Drivers by requiring Services to adhere to practices, many of which they claim to already be following.”
But Uber and Lyft feel the law interferes with their rights to exercise their own business judgments. Uber’s platform access agreement requires drivers to agree that their accounts can be deactivated without notice if a material breach or violation of terms is found.
Uber faces nearly 4,000 sexual assault cases in a federal multidistrict litigation in California, with an early trial awarding $8.5 million for an Arizona woman who said she was raped. Lyft is named in far fewer in its federal MDL, but both companies still must litigate thousands of cases nationwide in state courts.
So, whether to keep a driver on is complicated when complaints are made.
“For example, when a driver faces reports of sexual assault or substance use, Uber may have to make decisions based on imperfect information,” the company said. “Uber’s standards and policies thus may require that being the subject of a serious report makes one ineligible for platform access, which protects riders and the public at large.”
Adams wrote the City Council shortly before leaving office in December to express his worries with the measure, calling it an “expensive new government program that would be called upon to second-guess business decisions.”
The Office of Management and Budget had estimated 170 workers, including 105 lawyers, would be needed in the Department of Consumer and Worker Protection to handle an estimated 2,000 deactivation claims each year. The unit was estimated to cost $23 million annually.
Uber said it was already doing more for the safety of New Yorkers than the City Taxi & Limousine Commission, under which it maintains a high-volume for-hire service license. While that commission only focused on in-state data, Uber said it looked at national information for background checks that disqualified hundreds of prospective drivers.
“Uber takes the decision to remove access to driver accounts seriously and considers deactivation to be a last resort,” the company said.
