Lyft, Uber to suspend rideshare operations in California
A California court ordered the companies to reclassify their drivers as employees rather than independent contractors
UPDATE: With only hours to spare before their deadline, both Uber and Lyft have narrowly avoided suspending services in California after an appellate court granted them a temporary reprieve to delay an order mandating them to reclassify their drivers in the state by Friday.
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Los Angeles residents who depend on rideshares to get around may find themselves in a bind this weekend as it appears both Uber and Lyft may only be hours away from halting their services in their home state of California.
According to CNN, last week a California court ordered the companies to reclassify their drivers in the state as employees rather than independent contractors and only gave them 10 days to do so.
Tuesday, Uber sent a message to its user’s warning, “We may have to temporarily suspend ridesharing in California starting this week.”
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This comes in the wake of an ongoing dispute over a new law mandating that the companies to reclassify their drivers as employees, which would most likely cause a huge shift in how the on-demand economy operates.
Lyft also sent a message informing users that it would suspend service in the state by end of the day unless the appeals court granted its request to delay the reclassification order.
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“This is not something we wanted to do, as we know millions of Californians depend on Lyft for daily, essential trips,” Lyft wrote in a blog post on Thursday.
This is all just the latest development in an ongoing lawsuit with both companies pushing for a referendum in November to exempt them from the law in question which is known as AB-5.
Local station KTLA reports, “California represents a substantial chunk of both companies’ businesses. It accounted for 9% of Uber’s worldwide rides before the pandemic caused people to avoid traveling. The state is even more important to Lyft, which doesn’t operate outside of the U.S. besides Canada. California accounted for 21% of Lyft’s rides before the pandemic.”
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