Uber, Lyft could shut down starting Thursday unless appeals court steps in
Uber and Lyft officials have threatened to shut down their ride-hailing services in California at midnight Thursday night in response to a court ruling requiring drivers to be classified as employees instead of independent contractors.
The companies have been fighting the change, which comes as a result of the passage of Assembly Bill 5 that took effect Jan. 1.
San Francisco-based Judge Ethan P. Schulman ruled in favor of California Attorney General Xavier Becerra, and the city attorneys of San Diego, Los Angeles and San Francisco in a lawsuit alleging Uber and Lyft have misclassified their drivers, preventing them from receiving "the compensation and benefits they have earned through the dignity of their labor'' such as the right to minimum wage, sick leave, unemployment insurance and workers' compensation benefits.
Schulman stayed his Aug. 10 ruling for 10 days to allow the companies time to appeal.
Both companies have stated that if their appeals are unsuccessful and the ruling isn't stayed further, they may shut down operations in California as they would not be able to rapidly restructure their operations in order to comply with AB5.
Uber notified drivers this week about the possible shutdown, “so you can plan accordingly.”
Uber and Lyft are also working to combat AB5 by sponsoring Proposition 22, a ballot initiative that, if approved by voters in November, would allow ride-hailing drivers to work as independent contractors.
The companies contend in part that classifying the drivers as employees would force them to work standard shifts and hours, instead of their current ability to work when they want.
A group of Uber and Lyft drivers are expected to hold a rally at Los Angeles International Airport today as they await word from the ride-hailing companies on a possible shutdown of service across California due to a legal battle over classification of its workers.
The drivers, organizing with the Mobile Workers Alliance, plan to gather at 9600 Will Rogers St. in Westchester at 10:30 a.m. then drive to the LAX-It lot at the airport. The drivers will be passing out masks and other safety equipment as part of the gathering.
