Lyft and Uber filed a lawsuit in Manhattan federal court to block a New York City law restricting driver deactivations.
The legislation takes effect July 28.
The law requires companies to provide a bona fide economic reason or just cause for dismissal.
Lyft contends the mandate violates constitutional rights.
The company argues the law forces the retention of underperforming or unsafe drivers.
These regulations allegedly threaten passenger safety and risk damaging corporate reputations.
This legal battle could set a national precedent for gig economy labor practices and municipal regulation.