Federal Judge Gregory Woods of Manhattan issued a ruling that marks a turning point in the conflict between New York City authorities and ride-hailing giants. The court held that the city has no right to prohibit Uber Technologies and Lyft from deactivating driver accounts without prior notice, declaring the relevant law unconstitutional.
Balance Between Safety and Business Rights
In his written decision published on Tuesday, Judge Woods pointed to a fundamental imbalance in the new city legislation. In his view, the law adopted earlier this year benefits only a narrow circle of drivers while infringing on the platforms' right to control the safety of their services. The judge issued a preliminary injunction blocking the enforcement of the law, which was set to take effect on July 28, pending final resolution of the case.
Essence of the Controversial Legislation
The controversial law, one of the first of its kind in the US, was passed in January after the New York City Council overrode a veto by former Mayor Eric Adams. The document introduced strict requirements for aggregators:
- Mandatory notification to drivers 14 days before deactivating their accounts.
- An exception to the rule was made only for cases of "gross misconduct".
- Possible reinstatement of drivers blocked since 2019 solely due to lack of notice.
Arguments of Opponents and Historical Context
Former Mayor Eric Adams had previously stated that the law would create an expensive and cumbersome bureaucratic structure for reviewing complaints. However, legislators insisted on the need to protect the rights of hired drivers. In June, Uber Technologies sued the city, arguing that forcibly retaining unwanted drivers on the platform violates the Constitution. Now, the federal court has supported the company's position, ruling that city authorities cannot dictate to businesses the conditions for content moderation and personnel management.