TLDR
- Uber sues NYC to block driver deactivation restrictions before July 28
- New York driver protection law sparks legal challenge from Uber
- Uber says NYC deactivation rules could impact rider safety measures
- Uber fights law that limits its authority to remove drivers quickly
- NYC reviews Uber lawsuit over controversial driver rights legislation
Uber (UBER) shares showed strong intraday recovery after a sharp morning selloff, climbing from around $67.50 to finish the regular session at $69.55, up 1.37%, with buyers driving the stock back near the day’s highs. The late-afternoon rally and close above the $69 level suggest bullish momentum remains intact, although the slight after-hours dip to $69.45 indicates some profit-taking near resistance.
Uber Challenges New Driver Deactivation Rules
Uber filed its complaint in Manhattan federal court before the law takes effect on July 28. The company seeks to block Local Law 52 of 2026 through preliminary and permanent court orders. Additionally, Uber argues the measure limits its ability to manage driver access to its platform.
The law requires large ride-sharing companies to show just cause or an economic reason before removing drivers. However, the measure allows deactivations involving fraud, violence, discrimination, and account sharing. City lawmakers approved the legislation after overriding a mayoral veto earlier this year.
Uber stated that the law could interfere with platform safety standards and operational decisions. Furthermore, the company argued that retaining certain drivers could damage its reputation. The lawsuit also seeks recovery of legal costs associated with the case.
Uber Raises Safety and Privacy Concerns
The company challenged a provision requiring at least 14 days of notice before deactivating drivers. Uber argued that the waiting period could create safety concerns in some situations. The company claimed the requirement limits its ability to respond quickly.
Another disputed section allows drivers to request city reviews of deactivation decisions. Uber argued that the process places the burden of proof on the company. The lawsuit claims the review framework favors drivers during disputes.
Uber also challenged requirements involving access to rider feedback and complaint information. The company argued that disclosure could affect rider privacy protections. Uber claimed the provision could make fraud prevention more difficult.
Lawmakers Defend the New York Measure
According to court filings, more than 12,000 drivers could seek reinstatement under the new framework. Uber argued that reviewing those historical cases would create a significant administrative burden. Many of the affected deactivations occurred after July 2019.
The company also stated that older records may not remain available for extensive legal reviews. Therefore, Uber argued that compliance could require substantial resources and additional administrative work. The lawsuit presents these concerns as part of its broader challenge.
New York City officials said they are reviewing the case. Meanwhile, City Council leaders defended the legislation and its protections for app-based drivers. Lyft, which would face the same requirements, had not announced a legal response at the time of reporting.
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