Business

Uber says it may shut down California services due to new driver ruling

A judge blocked Uber and rival Lyft from classifying drivers as independent contractors rather than employees

Photo: REUTERS/Luisa Gonzalez
  • Several hundred thousand “gig” workers, including many at ride-hailing companies and app-based food delivery services, are affected by the Californian rule;
  • The shutdown would irreparably harm Uber and the people who rely on its rides, says the company.

Uber Technologies would be forced to shut down its ride-hailing operations in California if a court ruling that blocks it from classifying its drivers as independent contractors goes into effect, the company said in a court filing.

A California judge last Monday granted the state’s request for a preliminary injunction blocking Uber and rival Lyft from classifying their drivers as independent contractors rather than employees.

If the court doesn’t reconsider, then in California, it’s hard to believe we’ll be able to switch our model to full-time employment quickly.

Dara Khosrowshahi, CEO of UBER

Several hundred thousand “gig” workers, including many at ride-hailing companies and app-based food delivery services, are affected by the law known as Assembly Bill 5 (“AB5”), which took effect on Jan. 1.

The shutdown would irreparably harm Uber and the people who rely on its rides operations to generate income, the company said in its court filing on Tuesday.