Judge Halts NYC Rule That Would Limit Rideshare Companies' Ability to Deactivate Drivers
A federal judge issued a temporary injunction stopping New York City’s “just cause” law that would have required Uber and Lyft to give 14-day notice before deactivating drivers.
New York City’s “just cause” legislation, aimed at high-volume for-hire vehicle services, would have forced Uber and Lyft to provide 14 days’ notice and demonstrate a valid reason before removing a driver, with an exception only for “imminent danger.” The statute’s definition of economic justification was vague, and it applied retroactively to deactivations since 2019. Uber challenged the law in federal court, claiming it breached the Contracts Clause, and the Southern District of New York agreed, stating the measure was narrowly directed at the two platforms.
Judge Gregory Woods highlighted that deactivations affect a minuscule share of drivers, making the law’s impact negligible while potentially extending the presence of unsafe drivers. He also blocked the city’s plan to fund a $73.4 million office at the Department of Consumer and Worker Protection to oversee compliance. The decision leaves the status of the law uncertain, with the city considering appeal or revision.
Why it matters
The ruling determines whether cities can impose employment-style protections on gig-economy drivers, affecting safety and platform flexibility.
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