Lyft to suspend ride-hailing in California

Angela Lang/CNET

Lyft will suspend its ride-hailing service in California on Thursday following a court order within the state that requires it and rival Uber to reclassify drivers as staff. 

“Because of a courtroom order, we’ll be suspending rideshare all through California at 11:59 PM PT on Thursday, August 20,” the corporate stated in an update on its website. “We did every little thing we may to stop this from taking place and maintain Lyft accessible for you, nevertheless it wasn’t attainable to overtake our enterprise mannequin and operations in ten days.”

Choose Ethan Schulman of the San Francisco Superior Courtroom dominated on Aug. 10 that the ride-hailing firms must start classifying their drivers as employees in the state. The choose stated the injunction towards the businesses would not be enforced for 10 days to provide them an opportunity to attraction — one thing each firms stated they’re doing. 

The injunction is a part of a lawsuit against Uber and Lyft filed by the state of California in Could. The go well with says the businesses “exploited a whole bunch of 1000’s of California employees” by classifying drivers as unbiased contractors and are violating California’s AB 5 law, which took impact in January.

Uber and Lyft at present classify their drivers as unbiased contractors, which implies the employees pay for their very own bills, similar to fuel, automobile upkeep and insurance coverage. Drivers additionally do not have labor advantages like minimal wage, medical health insurance or paid sick go away. In the event that they had been to be categorised as staff, lots of these prices would then fall onto the businesses.

Each Lyft and Uber stated final week that if California forces them to categorise their drivers as staff, they’re going to suspend operations in the state

Lyft famous on its web site that individuals can nonetheless use the Lyft app to entry bike, scooters, automobile leases and public transit info. 

In a weblog put up on Thursday, Lyft additionally urged individuals in California to assist a ballot measure that the companies are backing referred to as Proposition 22. In all, Uber and Lyft — together with Doordash, Postmates and Instacart — have put $110 million behind the measure. The proposition, which will probably be up for vote in November, seeks to exempt the gig financial system firms from AB 5.

Uber did not instantly reply to a request for remark. 

CNET’s Dara Kerr contributed to this report. 

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Carrie Mihalcik