Lyft's Rideshare Suspension in California

Lyft's Rideshare Suspension in California

"We are glad that the Court of Appeals recognized the important questions raised in this case, and that access to these critical services won't be cut off while we continue to advocate for drivers' ability to work with the freedom they want", said Uber spokesperson Noah Edwardsen in a statement.

The unavailability of the two ride-hailing services also would have delivered another blow to the California economy by taking away the paycheques of Uber and Lyft drivers while also making it more hard for people without cars to get around. According to an analysis by the University of California-Berkeley Labor Center, Uber and Lyft collectively would have paid $413 million into the California Unemployment Insurance fund from 2014 to 2019 if their drivers were classified as employees. Those companies funded the measure along with DoorDash, Instacart and Postmates.

Assemblywoman Lorena Gonzalez, D-San Diego, had called the companies' decision to leave California a "mean-spirited tactic to bully Californians into giving the companies a special exemption" from the law. Then a last-minute reprieve averted what was threatening to become a midnight shutdown of the ride-sharing services in California.

Lyft announced it will halt its ride-sharing service in California on Thursday in response to a state law that requires them to make drivers employees instead of independent contractors.

Lyft and Uber have asked a state appeals court to intervene before Thursday night.

An Aug. 9 poll among Californians by Refield & Wilton showed 41% of voters planned to support the companies' proposal and 26% oppose it, with the remainder still undecided.

"California is America's economic engine because innovation and worker rights go hand in hand".

In a Thursday blog post, the company confirmed that the suspension will take effect on August 20 at 11:59 p.m. PT, while urging support for a ballot initiative, Proposition 22, that would let Californians vote on whether to exempt rideshare and delivery drivers from a new law that restricts gig work. "Any company that suggests otherwise is peddling a false choice", Becerra said. That ruling forced the companies to treat their drivers as employees starting Thursday after midnight. "In either case, drivers would likely earn a predetermined hourly wage for their time on-app-but, in exchange, fleets would need to monitor and enforce drivers' activity and efficiency, for instance by putting drivers into shifts, dictating where and when they must drive, and enforcing trip acceptance criteria".

Schulman's decision followed a new California law aimed at companies that employ gig workers.

"This change would also necessitate an overhaul of the entire business model - it's not a switch that can be flipped overnight", Lyft said. Uber's revenue-generating food delivery business Eats is not impacted by the shutdown, the company has said.

Neither Uber nor Lyft is profitable and both have taken deep hits from the pandemic, which has decimated demand for rides and prompted the companies to eliminate thousands of corporate jobs. Lyft, which only operates in the US and does not have a food delivery business, last week said California makes up some 16% of total rides.