Uber Technologies Inc (NYSE:UBER) filed a lawsuit seeking to stop New York City from enforcing a new rule that would limit when large ride-hailing platforms can remove drivers.

Uber Sues New York

According to a report by Reuters on Wednesday, Uber argued that the measure would make it harder to take action against drivers that the company views as unsafe or engaged in misconduct.

Uber did not immediately respond to Benzinga‘s request for comment.

In its court filing at a federal court in Manhattan, the company said the policy would cause immediate harm by weakening its brand and goodwill and by raising safety risks, the report said.

The measure, which is called the Local Law 52 of 2026, is scheduled to begin July 28 after the City Council approved it 46-5 in January, the report said.

The law would allow drivers to be removed for conduct such as account sharing, fraud, violence, sexual harassment or assault, and discrimination.

Uber also challenged a requirement to provide 14 days' notice before deactivation, saying it could expose riders to retaliation and could force the company to revisit older cases dating back to 2019.

The company further argued that the law could compromise rider privacy by requiring disclosure of complaints to the driver accused of abuse.

Uber’s AI Pursuits, Robotaxi Push

Uber CEO Dara Khosrowshahi recently said that Uber blew through its annual AI budget within a single quarter, echoing comments made by the company’s Chief Technology Officer, Praveen Neppalli Naga, who shared that spending on Anthropic’s Claude code had exceeded expectations.

The company also outlined that it was shifting from a ride-sharing marketplace dependent on human drivers into an open platform that would offer a combination of gig workers with third-party autonomous vehicle fleets.

Further illustrating its Robotaxi bet, Uber shared that it was partnering with WeRide Inc. (NASDAQ:WRD) to launch Spain's first commercial robotaxi pilot in the Madrid region later this year.

Uber had earlier announced its plans to operate Robotaxis with Croatia’s Verne in Zagreb. The ride-hailing giant has outlined a commitment to invest $10 billion into the Robotaxi bet.

Uber offers an excellent Growth score, but fails to provide a favorable price trend in the short, medium, and long term.

Price Action: Uber shares fell 1.48% to $69.34 during premarket trading on Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.

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