Uber is taking Seattle to court to challenge the city’s new law aimed at regulating when delivery drivers can be deactivated. The lawsuit, filed by Uber on December 20, 2024, claims the law infringes upon the company's rights and hinders their ability to manage drivers effectively based on performance and safety concerns. By limiting when and how drivers can be deactivated, Uber argues, the city is impeding its operations and, inadvertently, the reliability of its services.
According to the Seattle Times, the law was passed by the Seattle City Council in August 2023 and is set to take effect on January 1, 2025. The legislation was championed by then-city council member Theresa Mosqueda, who highlighted the necessity for transparency and fairness for drivers. Mosqueda stated, “To deactivate a driver or to cut someone off to have their ability to have an income with no warning and no recourse is just wrong.”
The deactivation law is part of Seattle's broader effort to improve job security for gig workers, including food delivery drivers and other service providers. It requires companies like Uber to notify workers before deactivation, base such decisions on 'reasonable' policies, and conduct fair investigations before taking action. The overarching goal, according to local lawmakers, is to prevent arbitrary and sudden deactivations, which can jeopardize drivers' livelihoods.
Uber's lawsuit argues this ordinance compels the company to associate with drivers who may undermine its reputation by allowing those with poor performance and safety records to remain on the platform. They claim it significantly affects their contractual relationships with workers. The complaint describes the forces of this law as “substantially impairing” their business model.
The company also contends the law violates its constitutional rights, asserting it violates its First, Fourth, and Fourteenth amendment rights. "Uber believes ensuring consumers receive reliable, efficient, and, above all, safe deliveries is more important than allowing couriers with consistently low consumer ratings... The city does not," the lawsuit states.
Seattle's mayor, Bruce Harrell, who signed the bill, believes the legislation is necessary. He remarked, “App-based workers are an important part of our city’s economy and deserve protections against sudden deactivations.” Harrell's administration has pledged to defend the city against Uber's legal challenge, stating its commitment to strong worker protections.
Complicative dynamics surface as the law stipulates companies must give drivers 14 days' notice before any deactivation, requiring documented reasons for such actions and maintaining procedures for drivers to contest these decisions. Nevertheless, Uber claims these requirements could hinder quick action against problematic drivers and lead to poorer service for customers.
Uber has made it clear they believe their current policies effectively guarantee safety and reliability for consumers. The company argues the legislation could force it to share confidential data about customer interactions and fraud detection methods, risking customer safety and privacy.
Despite significant lobbying efforts against the law, which sparked divisions among city council members, it passed with the backing of labor advocates who emphasized the need for stronger protections for gig workers. Seattle’s city council has been working for years to secure regulations and rights for those engaged with app-based delivery services — often operating without the ability to unionize.
The city council considered the power imbalance between gig companies and their contractor workers, as deactivations were seen as opaque and detrimental. This law aims to correct such disparities, advocating for the rights of gig workers—a move viewed as groundbreaking at the time.
Interestingly, the political environment has shifted since the law's passage, with current council president Sara Nelson originally opposing the legislation, now stepping up to affirm the council's commitment to worker rights. Nelson’s rise signals changing dynamics as the city navigates labor-related regulations and how gig workers are treated.
Uber, on the other hand, claims the ordinance undermines its established safety standards and raises significant privacy issues. Their legal filing reflects the company's frustration at what they deem is the city turning operational decisions over to local governance. “We have made repeated efforts to engage with the City on this ordinance... our concerns have been ignored,” said the Uber spokesperson.
The outcome of this lawsuit carries potential implications beyond Seattle, as it could establish precedence for how cities can regulate gig economy companies. If the court rules in favor of Uber, it could reverse the momentum gained by labor advocates aiming to secure rights for gig workers. Likewise, if Seattle prevails, it could pave the way for stronger regulations on app-based work, potentially reshaping the gig economy across various municipalities.
With such pivotal stakes, both parties await the court's ruling as it navigates the complicated intersection of worker rights, business operations, and the gig economy's future. Seattle is poised to set the tone for how app-based companies interact with their drivers, and the outcome could echo well beyond city limits, affecting related laws all over the nation.
