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Lyft May Shutdown In California

Lyft is warning it may join Uber in shuttering operations in California following a preliminary injunction classifying its drivers as employees....
Lyft May Shutdown In California
Written by Matt Milano
  • Lyft is warning it may join Uber in shuttering operations in California following a preliminary injunction classifying its drivers as employees.

    Uber, Lyft and the state of California have been locked in a battle over how to classify the two companies’ drivers. Under the Assembly Bill 5, gig workers are considered employees if they are critical to a company’s business. The law has profound implications for companies like Uber and Lyft, whose entire model is geared around independent contractors.

    In his ruling, the judge granted a preliminary injunction preventing Uber and Lyft from classifying their drivers as independent contractors, effectively making them employees. While both companies plan to appeal the ruling, according to The Verge, Lyft President John Zimmer made it clear that losing the appeal would result in Lyft leaving the state. In a call with investors, he said: “If our efforts here are not successful it would force us to suspend operations in California.”

    Uber and Lyft’s case will have far-reaching consequences for the gig economy in California and beyond.

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