Uber sues Seattle over driver deactivation law

App-based transportation company Uber is suing the city of Seattle in federal court to halt a new law from taking effect that will regulate when delivery drivers may be booted from its platform.

The case, filed less than two weeks before the law is scheduled to go live, argues the city is curtailing the company’s ability to speak for itself, forcing it to associate with problematic drivers and illegally demanding confidential business information – violations of its First, Fourth and Fourteenth amendment rights, the company says. It also raises safety concerns, a spokesperson said.

“Uber believes that ensuring consumers receive reliable, efficient, and, above all, safe deliveries is more important than allowing couriers with consistently low consumer ratings – a sign of serious performance and/or safety issues – to keep disappointing consumers,” the case says. “The City does not.”

Among the first of its kind in the country, the law’s aim is to limit the ability of companies like Uber and DoorDash to bar delivery drivers from its platform. Passed in August 2023, city lawmakers viewed such “deactivations” as both clouded in secrecy and devastating to the finances of those no longer able to drive. Absent drivers’ ability to unionize, the law was one piece in a yearslong campaign by past city councils and local labor advocates to regulate gig-work companies on behalf of their independent contractor workers.

The companies, which have reputations for aggressive lobbying at all levels of government, fiercely opposed the law and two council members voted against it – former Councilmember Alex Pedersen and current Council President Sara Nelson.

The law’s implementation has been waylaid as the city’s Office of Labor Standards worked through some of the ordinance’s administrative details.

If allowed to go into effect Jan. 1, the law would require the companies to write a “reasonable” policy for when a driver is deactivated and give the drivers early notice if they are going to be kicked off a platform.

Although the law does not define what a reasonable policy should look like, it says the companies should not deactivate drivers for failing to drive enough hours, falling below a minimum customer rating or turning down ride offers and deactivation should not be based on the results of a background check or driver record, except in egregious circumstances.

The law also requires the companies to conduct a “fair and objective” investigation and provide 14 days’ notice before deactivating a driver, except in certain circumstances. Drivers should also be provided with records justifying their deactivation and be given the chance to contest the decision.

Finally, the companies are required to turn over internal data on how frequently and why they kick off drivers from their platforms.

“App-based workers are an essential part of our city’s economy and deserve protections against sudden deactivations that can significantly threaten their ability to make a livelihood,” Mayor Bruce Harrell said when he signed the bill into law.

Broadly speaking, Uber argues the law will hobble its ability to act quickly when deactivation is deemed necessary and lead to worse service for customers. The company already has internal policies for when someone is restricted from the platform, most commonly for failing background checks or issues with uploading necessary documents, it argues.

The company also bars drivers from working if their customer rating dips too low. The driver is given advanced warning.

By forcing Uber to write a policy it opposes, the company says it’s being forced to represent itself inaccurately to its customers. And by telling customers that drivers won’t be deactivated even if they fall below minimum ratings or are flagged in a background check, Uber contends it’s being required to say it doesn’t care about those things, when it does.

Further, the company says it is being unfairly forced to “associate” with those workers it would otherwise not allow to use its platform. The company also opposes any disclosure of internal data.

The law, the company says, “offloads the City’s vision of what amounts to an ‘unwarranted deactivation’ – and the harmful effects that vision is likely to bring about – onto companies like Uber by forcing them to announce policies that espouse the City’s views as if they were the companies’ own.”

A spokesperson for the Seattle City Attorney’s Office declined to comment on pending litigation.

The political environment in which this lawsuit comes has dramatically changed since the law was first passed. Nelson, who opposed its passage from her minority position on the council, is now the council’s leader and has more allies than before.

At the same time, 2024 has served as a cautionary tale when it comes to how this council approaches labor regulations. Nelson’s first piece of legislation was to rewrite the previous council’s bill on minimum wages for app-based delivery drivers into something more palatable to the companies. That effort withered, however, amid opposition from labor advocates and concern from some of her colleagues.

A bill from Councilmember Joy Hollingworth extending minimum wage tip credits to small businesses also ran into pushback and was tabled.