Amazon.com, Uber Technologies and Instacart have joined forces in a federal lawsuit seeking to overturn a New York City law that would limit their ability to remove delivery workers from their digital platforms, escalating a dispute over worker protections and corporate control in the app-based delivery industry.
The companies filed their complaint Wednesday in federal court in Manhattan, arguing that the legislation infringes on constitutional protections involving free speech and due process, according to a report published Thursday by Reuters. The law is scheduled to take effect in January 2027.
The legal challenge brings together three major competitors in the food and grocery delivery market, highlighting shared industry concerns about regulations that could restrict how companies manage their independent contractor workforces.
Under the legislation, delivery platforms would generally be required to establish a legitimate reason before terminating a worker’s access to their services. Grounds for removal could include misconduct or failure to fulfill job responsibilities, while companies would also face requirements to notify workers before deactivation.
The plaintiffs contend that those restrictions interfere with their ability to make operational decisions, enforce platform standards and maintain contractual relationships with delivery workers.
According to Reuters, the lawsuit also challenges provisions that would apply to certain deactivation decisions dating back to 2021. The companies argue that the retrospective requirements, along with obligations affecting their communications, create additional constitutional concerns.
Companies Raise Safety and Operational Concerns
The dispute centers on the authority delivery platforms should retain to suspend or permanently remove workers whose conduct raises concerns about safety, fraud or service quality.
Instacart said in an October 28 statement that the legislation could complicate efforts to address harassment, theft, fraudulent activity and misuse of customer information. The company also warned that the rules might require it to reconsider previously closed cases involving workers removed for safety-related reasons.
Instacart maintains that stronger procedural requirements could expose customers, retailers and other delivery workers to additional risks.
The companies’ legal position reflects a broader concern that restrictions on deactivation could weaken their ability to respond quickly to conduct they consider harmful.
Supporters of the legislation, meanwhile, argue that delivery workers need protection against losing access to their livelihoods without adequate justification. Worker advocates say unpredictable account suspensions can create financial instability and encourage couriers to prioritize completing deliveries over their own safety.
Related: Amazon Loses Bid to Delay FTC Antitrust Trial as California Case Looms
The competing arguments underscore a persistent tension in the gig economy, where platforms rely heavily on independent contractors while retaining significant authority over their access to work.
Earlier Court Victory Offers Legal Precedent
The latest lawsuit follows a significant legal victory for ride-hailing companies in a related dispute with New York City.
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In July, U.S. District Judge Gregory Woods temporarily blocked enforcement of a separate municipal law requiring Uber and Lyft to provide advance notice before removing drivers from their platforms.
The judge concluded that the ride-hailing companies were likely to succeed in their constitutional challenge, citing concerns about restrictions on their contractual rights and ability to maintain platform safety, Reuters reported at the time.
That earlier ruling did not permanently invalidate the ride-hailing legislation, but it prevented enforcement while litigation continued.
Amazon, Uber and Instacart are now seeking similar judicial intervention against the delivery worker law, arguing that the two regulatory frameworks raise comparable constitutional issues.
According to Reuters, the companies intend to request a preliminary injunction that would prevent the delivery legislation from taking effect while the federal case proceeds.
Broader Implications for Gig Economy Regulation
The legal confrontation comes as New York City continues expanding oversight of app-based delivery businesses, including rules governing compensation and working conditions.
The city has previously introduced minimum pay requirements for delivery workers, reflecting efforts to provide greater economic stability in an industry characterized by flexible schedules and contractor-based employment.
For delivery platforms, the latest dispute raises questions about the extent to which local governments can regulate decisions traditionally controlled by private companies, including who may use their services and under what circumstances.
For workers, the outcome could determine whether they gain stronger protections against losing access to delivery assignments without a clearly established reason.
The litigation may also attract attention beyond New York as policymakers elsewhere consider similar safeguards for people earning income through digital platforms.
The case, Uber Technologies Inc. et al. v. City of New York, No. 1:26-cv-09455, is pending in the U.S. District Court for the Southern District of New York.
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