Both Uber and Lyft face a Friday deadline to change business practices in California.
Ride-hailing firm Lyft says it is suspending operations in California after a judge ordered it to treat drivers as employees. Both Lyft and Uber were told they must classify their drivers as employees and not contractors by Friday. Lyft has now said its services in California will stop at 23:59 local time on Thursday (06:59 GMT on Friday). Uber has warned it will have to do the same if a stay is not granted by an appeals court before the deadline. But Uber has yet to make any formal announcement. “This is not something we wanted to do, as we know millions of Californians depend on Lyft for daily, essential trips,” Lyft said in a statement posted online. What happened? Both firms have always argued their drivers are self-employed contractors. But a California law that came into effect earlier this year, known as AB5, extended classification as an employee to workers in the “gig economy”. The judge’s ruling that the law applied to both Uber and Lyft means the firms need to provide drivers with extra benefits, such as unemployment protection. Both companies filed an appeal to the judgement – and asked for a stay on its enforcement while the courts dealt with the appeal. Unless the stay was granted, both companies had 10 days to undertake what they saw as a significant overhaul of their business in California.
