Two major global ride-hailing companies Uber and Lyft have sued New York City over a law that restricts how such platforms can deactivate drivers. The companies argue it will make it harder to remove unsafe drivers, risking their credibility.
Mint unpacks why this battle matters beyond New York, how it could shape the next phase of gig-worker regulation globally, and whether India may eventually move towards similar protections for drivers and delivery workers.
What is the new law?
New York City's new law—Local Law 52 of 2026—gives ride-hailing drivers greater protection against what regulators consider wrongful deactivations. The law prevents platforms such as Uber and Lyft from removing drivers unless there is ‘just cause’ or a bona fide economic reason, while still allowing immediate deactivation in cases involving fraud, violence, sexual misconduct, discrimination, or account sharing.
It also requires companies to provide most drivers with 14 days' notice before deactivation and creates an appeals process for drivers to challenge their removal from the platform. If the deactivation is found to be wrongful, the driver would be entitled to remedies, including reinstatement and back pay.
Why are Uber and Lyft opposing it?
While supporters argue that drivers can currently lose access to their livelihoods with little explanation or recourse, Uber and Lyft say the New York law could undermine their ability to keep riders safe. In separate lawsuits, the companies argue that the legislation would make it significantly harder to quickly remove drivers accused of misconduct, threatening behaviour or safety violations.
Uber and Lyft have also raised privacy concerns, arguing that the law could require platforms to share details of passenger complaints with the drivers accused of misconduct. The companies further object to the 14-day notice requirement, saying it could create opportunities for retaliation.
They said the measure violates their constitutional rights, including due process and free-speech protections.
Why does it matter beyond New York?
The significance of the case extends far beyond New York. Ride-hailing platforms such as Uber and Lyft rely on their ability to manage millions of drivers through a combination of customer complaints, ratings, background checks and internal risk assessment systems. The companies fear that if New York's approach gains traction, it could become a template for regulators elsewhere, forcing gig platforms around the world to rethink how they balance worker protections with platform oversight.
For an industry built on algorithmic management and flexible labour, the ruling could redefine the relationship between gig workers and the platforms they depend on for work.
Do other countries have such laws?
New York's law reflects a broader global trend. France and EU require platforms to limit the use of purely automated decisions, mandating greater human oversight. Australia has also introduced protections that allow gig workers to challenge unfair deactivations before the country's industrial tribunal.
The International Labour Organization just last week agreed to adopt the first binding employment standards for gig workers in sectors such as ride-hailing and food delivery, potentially giving them rights on pay, safety and social benefits.
A total of 406 members, including the governments of China, Japan, Germany, France and South Africa, voted in favour of the employment standards convention, while eight, including the US and New Zealand, voted against. Another 36, including Britain and India, abstained.
Where does India stand?
India does not currently have equivalent protections. Drivers and delivery workers can generally be deactivated under platform terms and conditions, although some state-level gig-worker welfare initiatives have emerged.
For instance, the Karnataka Platform-Based Gig Workers Act, 2025 requires companies to provide written reasons and give advance notice before termination or deactivation, along with a grievance redressal mechanism through internal committees and a state board. Immediate removal is allowed only in limited cases like bodily harm or fraud, and workers retain the right to appeal.
This matters in India, where millions work with ride-hailing and delivery apps, and losing access to a platform often means losing income. In 2023, gig workers across eight cities joined a global campaign led by the Indian Federation of App-Based Transport Workers (IFAT), raising concerns about unfair deactivation. In 2024, the Telangana Gig and Platform Workers Union said that algorithm-based systems were leading to frequent suspensions, with about 25 drivers deactivated every week. The debate over new rules in New York and globally could also influence how India frames its approach to gig-worker protections.