Delivery apps sue NYC over worker protections

Uber and others compared the New York City law — which restricts how apps can abruptly suspend delivery couriers — to another city rule for ride-hail apps that is already blocked by preliminary injunction.MANHATTAN (CN) — A coalition of the major delivery app companies ­— Uber, Amazon and Instacart — sued New York City late Wednesday evening, seeking to block a city law that prohibits app-based delivery services from deactivating contracted delivery workers without just cause or a bona fide economic reason.The delivery app companies say the law “unconstitutionally interferes” with their contractual agreements by seeking to fundamentally rewrite for-hire agreements in place between the apps and the delivery couriers.“Put simply: The Delivery Deactivation Law eliminates plaintiffs’ contracted-for ability to exercise their own respective business judgments about who is allowed access to their applications,” they wrote in the 94-page complaint.The companies say deactivations of delivery couriers are “relatively rare and largely relate to safety or fraud.”The law, they say, will force the companies to reopen deactivation cases where a delivery worker was removed for fraud or safety reasons.Instacart, which specializes in grocery and convenience store delivery in the U.S. and Canada, says the lawsuit is “about preserving trust and safety on our platform.”“The city’s new rules will make it harder for Instacart to enforce standards that protect against unsafe conduct, harassment, theft, fraud and misuse of customer information,” Instacart wrote in a statement Wednesday night. “It could also force us to restore accounts removed years ago for those reasons, which could mean more fraudsters on the platform and less opportunities for those doing the right thing. That would put shoppers, customers and retail partners at risk and undermine the trust our platform depends on.”In the seven-count complaint, the delivery apps claim violations of the First Amendment and 14th Amendment, as well as the contracts, free speech and due process clauses of the U.S. Constitution.Representatives for the city did not immediately respond to requests for comment Thursday morning.The companies compare the law to a similar ordinance that imposes restrictions on ride-share apps’ ability to deactivate drivers, and was subsequently blocked by another judge in the Southern District of New York.“The court also held that Local Law 52 likely upsets the platforms’ reasonable expectations because no prior regulations or pending legislation made the law foreseeable,” the companies wrote. “And the court concluded that the law afforded Uber and Lyft no way to preserve their contractual rights.”The companies are jointly represented in the complaint by New York and Washington D.C.-based attorneys at Sidley Austin and Gibson Dunn & Crutcher.DoorDash announced on Thursday it was acquiring rival Instacart in a $17 billion deal that will further consolidate the two giants in app-based delivery industry.New York City Mayor Zohran Mamdani excoriated the corporate consolidation of the two app delivery companies as likely to lead to “higher prices, harsher exploitation, and greater economic inequality for New Yorkers.”“Just last month, DoorDash couldn’t seem to find the money to pay their deliveristas — until our administration forced them to give back $131M+ in stolen wages and penalties,” he wrote in a statement. “This week, they’ve managed to find $17 billion to acquire one of their main competitors.”Last month, New York City announced the settlement of a historic $131.5 million enforcement action against DoorDash, on behalf of 260,000 workers who were underpaid by DoorDash.Mamdani’s office says his administration previously secured more than $104 million in additional tips and $725 million in increased wages for delivery workers since taking office in January.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads