Amicus Brief: Uber v. City of New York

Earlier this year, New York City passed Local Law 52, which mandates that high-volume for-hire vehicle companies (i.e., Uber and Lyft) may deactivate a driver’s account only for “just cause.” Uber and Lyft have long used deactivation to maintain customer satisfaction and safety. Drivers sign a contract and agree to the terms, but NYC is trying to rewrite those contracts. This not only upsets markets, frustrates private ordering, and ultimately harms everyone involved, but it also violates the Constitution.  

Uber and Lyft sued, arguing that the law violates the Constitution's Contracts Clause, which prohibits governments from passing laws that "impair the obligations of contracts." This is a textbook example of a city doing just that. The district court agreed and found that the law was mostly designed to assist a small subset of drivers and that the "City Council did not consider the Law's effects on the broader citizenry of New York City, such as passengers and pedestrians—groups whose safety depends in part on swift deactivation of drivers accused of assault, fraud, or dangerous conduct."

The City has appealed to the Second Circuit, and the Manhattan Institute has filed a brief in support of Uber and Lyft. We argue that Local Law 52 is unlike other regulations of employment by reaching back up to seven years to rewrite contracts that were willingly and knowingly agreed to at the time. The City has many ways to protect employees, but rewriting contracts is not one of them. Moreover, the law actually hurts drivers as a class. Like many employment regulations, it benefits some incumbent workers at the expense of future workers. The Second Circuit should affirm the district court's injunction. 

Ilya Shapiro is a senior fellow and director of Constitutional Studies at the Manhattan Institute. Follow him on Twitter here.

Trevor Burrus is a legal policy fellow at the Manhattan Institute.

Jarrett Dieterle is a legal policy fellow at Manhattan Institute.