The ride-hailing organizations, UBER and Lyft have threatened to leave the state by 20th August, if their legal efforts fail.
Uber and Lyft are obligated to consign drivers as employees after a California superior court judge denied the companies’ attempt to delay a preliminary injunction from going into effect.
Both companies have threatened to leave the state if they are forced to change the status of their drivers from independent contractors to employees.
A week ago, the ride-hailing organizations, Uber and Lyft were ordered by California Superior Court Judge Ethan Schulman to classify their independent drivers as Employees.
The ruling process was in response to a preliminary injunction filed by California Attorney General Xavier Becerra as part of a lawsuit alleging the companies violate the state’s AB5 law that went into effect on 1st January.
The law under which both the organizations came enshrines the ‘ABC test’ to determine if someone is a contractor or an employee.
Neither of the organizations is ready to bag pack themselves quite yet. A spokesperson for both companies said they would be seeking further relief from the courts and would file another appeal before the end of the week.
The 10-day deadline to force drivers to be reclassified initialized when the judge issued the ruling on 10th August. If Uber and Lyft’s additional appeals are denied or aren’t heard in time, the cab-hailing companies say they will follow through on their threat to cease operations in California after 20th August.
Uber and Lyft say most drivers prefer the independent state because of the flexibility and ability to set their hours. But labor unions along with the elected officials contend on the issue of drivers being deprived of traditional benefits like health insurance and worker’s compensation.
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Uber and Lyft, in collaboration with DoorDash, are funding a ballot measure, proposition, that would override AB5 by classifying ride-hail drivers and other gig economy workers as independent contractors.
The ballot measure could be the company’s last-ditch if their efforts to turn the state’s legal challenges fail.
The two major brands, if left the operations in the State can be a bad-turnout for everyone like the drivers, end-users, and the government. Uber and Lyft have threatened to leave the state if their legal efforts against the union fail.