Barring 11th-hour intervention by an appeals court, Riverside County residents who rely on ride-hailing services Lyft or Uber for their travels could be searching for alternative forms of transportation beginning at midnight.
Both companies have hinted they will halt all California operations at midnight Thursday evening in response to a legal dispute over whether drivers should be classified as employees or independent contractors. The passage of Assembly Bill 5, along with a ruling by a San Francisco-based judge earlier this month, requires that drivers be considered employees, assuring them wage and other benefits.
The companies, however, are fighting that switch, claiming it will rob drivers of the independence to set their own hours, instead forcing them to adhere to set schedules. They also claim it will force many drivers out of work in favor of those working full-time shifts.
In an online blog post Thursday, Lyft officials confirmed that it will halt California operations at 11:59 p.m. unless an appeals court puts the San Francisco judge’s ruling on hold.
“This is not something we wanted to do, as we know millions of Californians depend on Lyft for daily, essential trips,” according to the post. “For multiple years, we’ve been advocating for a path to offer benefits to drivers who use the Lyft platform — including a minimum earnings guarantee and a healthcare subsidy — while maintaining the flexibility and control that independent contractors enjoy. This is something drivers have told us over and over again that they want.
“Instead, what Sacramento politicians are pushing is an employment model that 4 out of 5 drivers don’t support. This change would also necessitate an overhaul of the entire business model — it’s not a switch that can be flipped overnight.”
Uber officials also notified drivers this week that it would halt operations in California Thursday night barring intervention by an appeals court.
“We know that riders rely on Uber to get around, and drivers rely on the Uber app to earn income,” according to the company. “We wanted to let you know that this is a possibility, so you can plan accordingly.”
San Francisco-based Judge Ethan P. Schulman ruled this month 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.
The companies, however, have said a wholesale switch of drivers from independent contractors to employees to adhere with the court order and AB5 cannot be done so quickly.
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.