Lyft and Uber file lawsuit against New York City to challenge driver retention legislation.

Lyft has allied with Uber Technologies in a lawsuit against New York City, aiming to block a new law that they argue would force them to retain underperforming drivers who pose risks to public and passenger safety.

The Lyft lawsuit was initiated late Wednesday in Manhattan federal court, just a day after Uber filed its own lawsuit.

Both companies are contesting Local Law 52 of 2026, which generally prohibits large ride-sharing services from dismissing drivers quickly without a “bona fide economic reason” or “just cause.”
The firms argued that this law, which targets “wrongful deactivations,” infringes upon their due process and free speech rights as declared by the U.S. Constitution.

Moreover, they contended that the law could inflict irreparable harm by damaging their reputation and goodwill, while allowing unsafe drivers—including those accused of sexual misconduct—to remain active.

Lyft described the law as “hazardous,” while Uber deemed it “reckless.” The law is set to come into force on July 28, following a substantial override of former Mayor Eric Adams’ veto by the City Council in January.

A representative from New York City’s law department stated on Thursday that they are reviewing the two cases.

Headquartered in San Francisco, both Uber and Lyft have faced criticism for not doing enough to prevent drivers from abusing passengers or engaging in fraudulent activities.

As of June 1, Uber was facing 3,571 lawsuits, while Lyft had 54 lawsuits lodged against them in nationwide litigation in San Francisco federal court, concerning allegations of sexual misconduct by drivers.

In contesting the New York City law, Lyft and Uber expressed concerns over the requirement to provide drivers with 14 days’ notice prior to termination, as well as the potential obligation to rehire drivers who were deactivated since 2019 solely due to not receiving such notice.

Additionally, they raised privacy concerns about the requirement for passengers to detail alleged misconduct to the accused drivers and objected to the increased burden of proof when defending against deactivated drivers in court or arbitration.

City Council Speaker Julie Menin and Council Member Shekar Krishnan, the primary sponsor of the law, expressed their anticipation for the law’s confirmation in court, asserting that the council will “fight to ensure all app-based drivers have basic due process protections.”