Marketplace Logo Donate

Daily business news and economic stories from Marketplace

Uber, Lyft threaten to stop service in California

Heard on:
Uber and Lyft drivers with Rideshare Drivers United and the
 Transport Workers Union of America conduct a "caravan protest" outside the California Labor Commissioner’s office amid the coronavirus pandemic on April 16, 2020 in Los Angeles, California.

The conflict has come after a judge supported a state law that classifies drivers as employees, not contractors. Mario Tama/Getty Images

get the podcast

Update (Aug. 20, 2020): Lyft announced in a blog post that it will suspend ride-hailing operations at 11:59 p.m. PT on Thursday.


A battle over the contractor economy may erupt into full view in California on Thursday. Uber and Lyft could shut down their services in the state at midnight, after a judge supported a state law that classifies drivers as employees, not contractors.

The ruling from a San Francisco judge last week ordered Uber and Lyft to comply with a new California law, tightening rules over who is an independent contractor and who is an employee. The law’s aim is to extend traditional benefits, such as paid sick leave and unemployment insurance, to more workers.

The judge stayed his ruling for 10 days — that stay expires at midnight, meaning Uber and Lyft would have to comply. The companies have asked a state appeals court to intervene. If it doesn’t today, they say they’ll shut down in the state for months or longer to retool their businesses.

One option is to license their brands to franchisees that operate car fleets. Uber employs a similar system in parts of Europe.

The two companies are also pushing an initiative on California’s November ballot that would grant them an exemption from the state’s gig-worker law.

What's Next

Latest Episodes From Our Shows

Listen
Jul 1, 2022
20:04
Listen
Jul 1, 2022
27:05
Listen
Jul 1, 2022
1:50
Listen
Jul 1, 2022
7:20
Listen
Jul 1, 2022
8:00
Listen
Jun 30, 2022
31:02
Listen
Jun 28, 2022
26:17
Exit mobile version