Lyft will shutdown operations in California tonight, citing its inability to comply with a judge’s order forcing it to immediately re-classify its drivers as employees. Uber is also threatening to suspend service. SEE UPDATE BELOW
Lyft California Shutdown
In a blog post, Lyft says that it will suspend operations in California tonight at 11:59PM PT.
It warns that the consequences of AB5, a law that forces companies like Uber and Lyft (among others) to re-classify independent contractors as employees, will be that 80% of its drivers will lose their jobs “and the rest would have scheduled shifts and capped hourly earnings.” It also alleges that workers do not support AB5:
“What Sacramento politicians are pushing is an employment model that 4 out of 5 drivers don’t support. This change would also necessitate an overhaul of the entire business model — it’s not a switch that can be flipped overnight.”
It offers three warnings if its drivers must ultimately be re-classified:
- Passengers will experience reduced service, especially in suburban and rural areas
- 80% of drivers will lose work and the rest would have scheduled shifts, and capped hourly earnings
- Lower-income riders trying to make it to essential jobs and medical appointments will be faced with unaffordable prices (38% of Lyft rides in California begin or end in low-income areas that have few transit options already)
It offers a carrot as well if workers remain independent contractors, promising:
- minimum earnings guarantee
- mileage reimbursement
- health care subsidy
- occupational accident insurance
Finally, it urges California citizens to vote for Prop 22 this November (a measure Live and Let’s Fly supports), which would maintain independent contractor classification for Uber and Lyft drivers…and in other industries as well, including blogging.
But Gig Workers Rising, an organization that supported AB5, held a protest at Los Angeles International Airport this morning demanding that Lyft and Uber pay their “fair share” to drivers and classify them as employees.
It looks like Lyft service will no longer be available in California starting tomorrow. While this represents a particular tough tactic, Lyft is hoping to appeal to more drivers and riders by the move. Uber, which is also warning about suspending service in California, may not be far behind.
UPDATE, 12:27PM PT:
BREAKING: Uber and Lyft injunction stayed, hours before companies planned to pull out of CA
— Jeremy B. White (@JeremyBWhite) August 20, 2020
> Read More: A Day Of Reckoning For Uber And Lyft In California