Uber Likely to Temporarily Stop California Operations Due to New Driver Ruling

Uber Technologies Inc. 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 on Monday granted the state’s request for a preliminary injunction blocking Uber and rival Lyft Inc from classifying their drivers as independent contractors rather than employees.

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.

“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,” Chief Executive Officer Dara Khosrowshahi was quoted as saying by CNBC on Wednesday.

(Reporting by Bera in Bengaluru; Editing by Maju Samuel)

Related:

• California Judge Blocks Uber, Lyft From Classifying Drivers as Contractors
• Judge May Not Grant Injunction Forcing Uber, Lyft to Classify Drivers as Employees
• California Labor Commissioner Suing Uber, Lyft for ‘Systemic Wage Theft’