Uber Could Shut Down Operations in California This Week


Uber says they may begin shutting down service in California as early as midnight Friday. A court ruling expected as soon as Wednesday afternoon could determine whether Uber and Lyft will be able to operate in the state.

The rideshare companies have been threatening to shut down operations in the Golden State after a court ruled last week that their employees should be classified as employees under state law, and not independent contractors. The ruling gave Uber and Lyft ten days to contest the decision or make their drivers employees. However, corporate officials at both companies told the Washington Post that they would need more time to retool their apps to support the new employment model.

The lawsuit against Uber and Lyft was brought by California Attorney General Xavier Becerra and three city attorneys, including Los Angeles City Attorney Mike Feuer. The lawsuit cited the state's new law, Assembly Bill 5, that is intended to help provide benefits such as health insurance to gig-economy workers by classifying them as employees for the service. People who currently drive for Lyft and Uber are classified as 'Independent Contractors' who carry their own insurance, are only paid what they can earn while driving for the service instead of a minimum wage, and they are not reimbursed by the ride-sharing companies for expenses related to their job.

If the decision by the court in San Francisco stands, rideshare customers will need to hail a cab or call a friend for a ride beginning midnight Friday.

Photo: Getty Images


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