Ride-Hails Can’t Hide Behind Trade Secrets in Public Records Spat

(CN) – The city of Seattle might have to hand over data from ride-hail companies like Lyft to a private citizen as part of a records request, even though the records may contain the companies’ trade secrets, the Washington Supreme Court ruled Thursday.

Even if the records do contain trade secrets, the court found, they are not automatically exempt from disclosure. Instead, the companies must show there is no public interest in their disclosure and that revealing them would cause the companies “substantial and irreparable harm.”

Seattle demanded the records in order to enforce its 2014 ordinance limiting the number of “transportation networking companies,” or drivers whose customers hail rides through apps like Lyft and Uber. As part of a mediation agreement, the companies agreed to submit quarterly reports detailing the total number of rides in the city, the percentage of rides in each ZIP code, pick-up and drop-off ZIP codes, collision data and the number of rides requested for accessible vehicles.

Lyft and Raiser, Uber’s parent company, raised concerns about the confidentiality of their data, so the city promised to “work to achieve the highest possible level of confidentiality for information provided within the confines of state law.” The city then created a secure, encrypted file transfer protocol website controlled by login credentials and limited access to city employees in its departments of transportation, financial and administrative services who have a need to know the information.

Still, the companies claimed the reports contain trade secrets protected under the Uniform Trade Secrets Act.

In January 2016, a Texas man filed a public records request to view the information Seattle had collected from Lyft and Uber. Austin resident Jeff Kirk self-publishes his writing on public transportation systems, and wanted the information as part of his ongoing inquiry into redlining in ground transportation that excludes communities of color. He had already obtained similar data from taxi companies in Seattle.

The city told Kirk that Lyft and Raiser’s information was confidential and obtained an injunction in King County Superior Court, which ruled that the information was protected under the Uniform Trade Secrets Act. Both Kirk and the city appealed.

In its ruling on Thursday, an en banc panel Washington Supreme Court reversed. While the records likely meet the definition of trade secrets, the companies can’t protect the information unless they can show that their disclosure is “clearly not in the public interest and in fact poses substantial and irreparable harm,” the court ruled.

Overall, the panel found that the lower court weighed evidence too heavily in favor of the companies and disregarded the importance of public disclosure.

Lyft claimed that rival Uber, which has a larger market share in Seattle, could use its trade secrets to squeeze it out of the market. But the panel found the lower court merely accepted that assertion as fact, rather than probing its veracity.

Kirk, meanwhile, claimed the data was necessary for the public good, since academic studies had already shown that redlining was happening in Seattle. While the lower court acknowledged the public benefit of exposing redlining, “it erroneously concluded that the public could trust the city to adequately police redlining,” the panel wrote.

That error ignored the basic principle behind the Public Records Act, which states that “the people of this state do not yield their sovereignty to the agencies that serve them.”

The state Supreme Court remanded the case to King County Superior Court to determine whether the companies can prevent the city from handing its records over to Kirk under the higher standard set out by the panel.

 

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