NYC chauffeurs challenge city’s ride-hail data tracking at Second Circuit

Luxury ride-hailing app Wheely USA says recent “regulatory creep” has led to too much sensitive business data automatically being handed over to government authorities.MANHATTAN (CN) — A luxury ride-hailing company asked the Second Circuit on Tuesday to revive its challenge to New York City location reporting rules it says force private car services to hand over detailed trip-level data, including the precise locations where they pick up and drop off passengers, to a comprehensive New York City Taxi and Limousine Commission database without suspicion, probable cause or a warrant.Wheely USA, a premium international ride app company operating in Dubai and London, initially brought a complaint against the city in Manhattan federal court in February 2026, but U.S. District Judge Colleen McMahon quickly denied the company’s motion for a preliminary injunction, with prejudice, holding that the for-hire vehicle industry is a closely regulated industry with a diminished expectation of privacy, falling into a narrow exception from the protections of the Fourth Amendment.Before the Second Circuit, the on-demand luxury chauffeur app Wheely said the TLC’s impermissibly imposed “sweeping” automatic location data requirement, without explanation or justification, violates the company’s Fourth Amendment right to privacy.“Every month, the New York Taxi and Limousine Commission requires every FHV operator in the city to turn over a database of every trip they perform, including the time, date, driver ID and precise location of every passenger pickup and drop-off,” attorney Alex Drylewski said.Wheely argues the requirement to share sensitive location data affronts its business model — catering to wealthy, high-end clients who may not want their personal addresses circulating — and the company’s independent Fourth Amendment right to its own books and records.“What happened is then regulatory creep took over, and over the next decade, the rules then were piled on top of each other until we have what we have now, which is a recurring automatic requirement that every FHV turns over every trip, including the precise pickup and drop-off location every time,” he said later.Wheely claims the recurring New York TLC requirements are unmatched by any other jurisdiction and suggests a court ruling that bulk, suspicionless trip-tracking is constitutional would give regulators nationwide carte blanche to collect even more data on citizens.U.S. Circuit Judge Matthew Schwartz asked Wheely whether the company concurs it operates in a closely regulated industry, as taxis are regarded in relevant case law, which would be grounds for a narrow carve-out to the Fourth Amendment’s warrant requirement.Drylewski quickly sought to distinguish for-hire car services as “fundamentally different” from the New York City taxi industry.“Taxis are considered quasi-public. The government sets the rates. It is essentially a government-sponsored monopoly,” he said.Schwartz, a Donald Trump appointee, nonetheless pressed Wheely’s lawyer about similarities to both the highly regulated commercial trucking and taxicab industries.“But you agree that before your client attempted to enter the New York market, that FHVs were, whether you want to call it pervasively or highly, there’s a ton of New York City regulations as to FHVs,” the judge said.“There is no dispute that the FHV industry is subject to a lot of regulations, but as the Patel court said, a lot of regulations does not equal closely regulated within the meaning of Patel,” Drylewski said, referring to the Supreme Court’s holding in City of Los Angeles v. Patel, in which Los Angeles hoteliers prevailed over a city ordinance requiring them to keep guest records for 90 days under the Fourth Amendment as an unlawful invasion of their private business records.New York City Law Department’s Elina Druker argued the lower court’s dismissal should be affirmed because the TLC’s data location mandate for for-hire vehicles is a lawful reporting requirement, “akin to the many other regulatory reporting requirements, not for law enforcement purposes, that are collected to facilitate regulation.”“Particularly because this is a pervasively regulated industry and really has entered a market in which it has limited to no expectation of privacy, really, and particularly doubly so because of the availability of pre-compliance review,” she said.Druker told the panel records of a private car’s pickup and drop-off locations help the city’s effort to regulate drivers but are also broadly “the core of the transaction” of the entire for-hire vehicle business.“We’re asking for literally the definition of the transaction,” she said. “The transaction is: ‘I would like to be transported from point A to point B in exchange for money by a complete stranger — potentially, I’m drunk; potentially, in the middle of the night — I’m going to get into the car, and I want to be transported from point A to point B,’” the New York City Law Department attorney said.U.S. Circuit Judges Dennis Jacobs, a George H.W. Bush appointee, and Sarah Merriam, a Joe Biden appointee, joined Schwartz on the panel.The three-judge panel did not immediately rule on the appeal from the bench Tuesday.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