Uber may temporarily shut down in California due to latest driver ruling

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Earlier this week, both Uber and Lyft suffered blows in their attempts to classify drivers as temporary workers and not employees. The judgement by a court in California saw different, and the matter is going to be appealed, meaning this saga is quite far from finished.

Speaking about the situation during an interview with MSNBC, Uber CEO Dara Khosrowshahi, said that if the ruling is not successfully appealed, it would result in Uber shutting down its service in California for a few months.

While this could easily be interpreted as a passive aggressive move on Uber’s part, Khosrowshahi explains that such a reclassification of its drivers would require some logistical changes.

“It’s hard to believe we’ll be able to switch our model to full-time employment quickly,” he noted during the interview.

A reclassification could also prove costly, according to both Uber and Lyft, but that was not enough to dissuade the judge from his decision. As it currently stands, both organisations face a preliminary injunction which will force them to comply with the reclassification within the next 10 days.

“Uber will almost certainly be forced to shut off the Rides platform in California if the injunction goes into effect, which would irreparably harm Uber and all who rely on its Rides app to generate income for them and their families — particularly in the midst of a pandemic,” the company’s legal representatives noted earlier in the week.

Whether the reclassifying will stay in place, remains to be seen.

It also unclear whether other US states will adopt a similar decision to that of California, along with other regions of the globe where Uber operates. With the nature of employment for drivers proving a contentious issue here in South Africa too, this pending decision will prove interesting for all parties.

[Image – Photo by Austin Distel on Unsplash]

Robin-Leigh Chetty

Robin-Leigh Chetty

When he's not reviewing the latest smartphones, Robin-Leigh is writing about everything tech-related from IoT and smart cities, to 5G and cloud computing. He's also a keen photographer and dabbles in console games.