Uber and Lyft have said they may suspend their operations in California as soon as this week while simultaneously pushing for a referendum in November to exempt them from the law, known as AB-5.
The threats from the companies to halt their businesses came after a California court ordered them to reclassify their drivers as employees instead of independent contractors in 10 days. This reclassification would represent a radical shift for the two businesses. Independent contractors are not entitled to benefits like minimum wage, overtime pay, workers’ compensation, unemployment insurance and paid sick leave.
Both companies are grappling with sharp revenue declines from the pandemic and have histories of steep losses. Now they risk losing access to a state whose economy is larger than most countries – or else overhauling their business models.
Read the article at CNN Business.
