.....refuses to classify drivers as employees.....

......Uber will probably follow.......


Lyft suspending California service after being ordered to classify drivers as employees

Lyft said it is suspending service in California as of midnight PT Thursday because a court allowed a requirement that it reclassify drivers as employees.

Uber and Lyft warned last week they would likely have to suspend their ride-hailing services to comply with the court order, which would force them to restructure their operations and rehire workers.

Uber has not made a formal announcement about suspending service in California, but it is expected to do so.


.....Lyft said Thursday it is suspending service in California as of midnight PT because a court allowed a requirement that it reclassify drivers as employees.

The court granted a preliminary injunction last week but stayed it until Friday while the companies appealed.

Top executives at Uber and Lyft warned last week they would likely have to suspend service to comply with the order, which meant restructuring their operations and rehiring workers.

Uber has not made a formal announcement yet about suspending service in California, but it is expected to do so.

Lyft's stock tumbled 8.5% at one point Thursday following the news but regained about half the losses. Uber shares were up slightly after falling 3.2%.

The injunction was part of a lawsuit filed by California's attorney general and three city attorneys claiming Uber and Lyft skirted expenses for workers by falsely classifying them as contractors rather than employees. A judge granted the state's request for an injunction, saying he was unconvinced the companies met one of the key standards of the new state labor law, Assembly Bill 5, which says contractors must do work outside the normal course of the hiring firm's business.

In a statement following Lyft's decision to suspend service, California AG Xavier Becerra said, "California is home to millions of businesses and millions of workers. Every day, companies here protect their workers' rights and benefits. California is America's economic engine because innovation and worker rights go hand in hand. Any company that suggests otherwise is peddling a false choice."

Uber had planned to continue operating its food delivery service in California even during the suspension period, an Uber executive told the website Eater last week. The injunction targets ride-hailing drivers, but scrutiny on food delivery services has already ramped up under AB5, with San Francisco's district attorney suing the app-based delivery service DoorDash, claiming it misclassified workers.

Uber and Lyft have a chance to avoid further legal action under AB5 with a November ballot measure they're supporting. If voters support Proposition 22, Uber, Lyft and other app-based ride-hailing and food delivery services will be exempted from AB5. The measure also provides for additional benefits for gig workers at such services.

As of Oct. 1, Lyft had about 305,000 drivers in California who completed trips within the past year, though that number is likely far lower now as the coronavirus pandemic has kept many riders from traveling. A spokesperson did not immediately respond to a request for more recent figures.

Uber said in a recent blog post that its number of active drivers per quarter in California is about 209,000.

San Jose Mayor Sam Liccardo, a Democrat, said the outcome of Lyft leaving the state was disappointing.

"We simply don't want to see more people going without income, particularly when we know that there is a negotiated solution that we have here," Liccardo said in an interview on CNBC's "The Exchange" Thursday. He advocated for "portable" benefits along the lines of what Uber CEO Dara Khosrowshahi has labeled a "third way." Under the model, drivers working for multiple app-based businesses could accumulate benefits based on the number of hours they work no matter if they stick to one platform or not.

While a suspension could drum up support for the ballot measure if riders miss the services, it will also present the opportunity for competitors to swoop in. Two start-ups, Alto and Arcade City, have accelerated plans to enter California amid the legal battle. Even existing services and taxi drivers could seize the opportunity to gain back market share. Ridership across the board is already low, however, as travel has stalled during the coronavirus pandemic.

Still, a similar situation played out in Austin in 2016 when Uber and Lyft suspended service there over a new background check law they said would prolong their process of signing up drivers. While several new services took hold, the two giants regained much of their customer base when they returned after the state reversed the law.

In its announcement Thursday, Lyft encouraged voters to support Prop 22 and said Californians could still use the Lyft app for bike, scooter and car rentals.


no longer doing.....the heavy.....Lyft....ing.....?!

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I reject your reality and substitute my own!



Edited 2 time(s). Last edit at 08/20/2020 02:09PM by NewtonMP2100.

Ubet that Uber will soon follow.

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It is what it is.

Temporary reprieve. [www.engadget.com]

And all the 'gig economy' businesses will follow.. dropping their 'contractors' into the fire and pandemic and collapsed economy.

And will probably tell all these poor folks to rise up against their state government, who is just trying to protect them.

Taxi companies are going to go bananas... they don't have the capacity to handle the uptick.

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cbelt3
And all the 'gig economy' businesses will follow.. dropping their 'contractors' into the fire and pandemic and collapsed economy.

And will probably tell all these poor folks to rise up against their state government, who is just trying to protect them.

Taxi companies are going to go bananas... they don't have the capacity to handle the uptick.

Taxi companies are the reason that Uber and Lyft became successful. The later provided clean cars and for the most part friendly drivers. Pricing was declared upfront. When I was going to NYC regularly on business, I would only use taxis as a last resort. The cars and drivers were awful. They seemed to go out of their way to take a less efficient route.

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cbelt3

Taxi companies are going to go bananas... they don't have the capacity to handle the uptick.

They never did have the capacity to handle even the most limited amount of traffic, at least where I live. I used to have to wait at least an hour for a taxi to arrive. This is one of the reasons why these ride sharing companies found a business opportunity. Unless you live in a really large city like NYC, Taxis SUCK.

The long arm reach of California is making us reconsider doing business there too. We sell to municipalities and must conform to California employment laws and benefits even though we have no location or employees there. If we want to sell there, we must agree to meet all of their laws.

We can't do that and may stop direct sales. It is total social engineering.

Unfortunately our only choice is to stop selling into the state.

JPK

Taxi problems all stem from licensing procedures, procedures administered by local governments who limit completion by restricting the number of licenses allowed.

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macphanatic
Taxi companies are the reason that Uber and Lyft became successful.

I would argue that venture capitalists are the reason Uber and Lyft became "popular" (as VC was subsidizing the price of the ride in order to gain market share). If Uber and Lyft had rolled out at "profitable" rates in the beginning, it's likely their pricing would have been similar to taxis, and then their only advantage would have been the app - which might have been a great advantage...

But would it have been good enough to overcome the cost factor? I would say the reason we didn't use taxis (in Los Angeles) on a daily basis before was mostly the cost (yea, availability probably played a part of it), but when Uber showed up at half (or less) the cost of a Taxi, with an easy to use app, then BOOM, popularity! But if they had shown up at the same price as a Taxi? I think people would still be driving themselves around.

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RgrF
Taxi problems all stem from licensing procedures, procedures administered by local governments who limit completion by restricting the number of licenses allowed.

what about the dirtbag drivers who break the law and just don't care? Demanding cash, and driving away if it is a short ride?

Last time I took a cab he drove off when he saw my wheelchair. Never bothered to ask if I could transition myself into the car without help.

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Judge Lee wrote that “we cannot jettison our constitutional rights, even if the goal behind a law is laudable." 9th Circuit Court of Appeals

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Both divers and companies have to be licensed, both are overseen (or not) by local government.