Rather than treating the dedicated people who work for them like valuable members of society, Lyft and Uber are threatening to suspend their services in the state of California. This news comes after a California judge granted a preliminary injunction that prohibited Lyft and Uber from classifying their drivers as independent contractors instead of employees.
This latest move was applauded by union leaders and lawmakers, all of whom say the employment status would allow Uber and Lyft drivers to receive benefits like sick leave and overtime pay. Unsurprisingly, though, the rideshare companies have pushed back against the ruling, insisting that their drivers prefer having contractor status because it affords them more flexibility.
“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,” the CEO of Uber, Dara Khosrowshah, said to MSNBC on Wednesday.
The companies in question were given 10 days to appeal the ruling before it goes into effect.
Lyft, Uber, Doordash, Instacart, and Postmates are now funding Proposition 22, a ballot measure that would make gig workers exempt from Assembly Bill 5. The new state law presents an “ABC Test” that determines whether workers should be classified as an employee or contractor.
“If our efforts here are not successful it would force us to suspend operations in California,” Lyft Presiden John Zimmer said Wednesday during an earnings call. “Fortunately, California voters can make their voices heard by voting yes on Prop 22 in November.”
According to reports from the Los Angeles Times, Lyft revenue dropped 61 percent to $339 million during the second quarter. Uber also reported a big loss in their second-quarter last week, confirming a revenue decline of 20 percent to $2.18 billion.