Uber CEO Dara Khosrowshahi said Uber could shut down in California for months if a preliminary ... [+] injunction issued this week isn't reconsidered. Both companies have said they would appeal the ruling, which was stayed for 10 days. The ride-hailing giant is currently appealing against a Supreme Court judgment in the state that requires the company to recognise its drivers as employees and give them employment protections as a result. Factset: FactSet Research Systems Inc.2018. Uber has warned it will have to shut down in California if it is forced to classify drivers as employees instead of independent contractors. Uber CEO says app will temporarily shut down in California if new ruling upheld. Uber Eats and other services like Lyft e-scooter rentals would not be affected by a shut-down of ride-hailing services in California over driver status. Uber and Lyft Could Shut Down in California This Week Over 'Disruptive' Court Order this link is to an external site that may or may not meet accessibility guidelines. All rights reserved. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC 2018 and/or its affiliates. If drivers were classified as employees, Uber and Lyft would be responsible for paying them minimum wage, overtime compensation, paid rest periods, and reimbursements for the cost of driving for the companies, including personal vehicle mileage. The New York Times reported earlier this week that while pushing their November ballot initiative, the companies are also considering their other options, including exploring a franchise-like model where they would not employ drivers directly but would instead potentially license their name to fleet operators in the state. Uber may shut down its operations in California, one of its largest markets in the US, if it is forced to classify drivers as employees, the company’s CEO Dara Khosrowshahi said on MSNBC Wednesday. By Irina Ivanova. With hours to go before the original deadline, the companies were bracing for a shutdown. Here's why, The Rockefeller Foundation -- founded on oil money -- is dropping fossil fuels. Uber and Lyft have just over a week left to appeal the injunction. Becerra later filed a motion for a preliminary injunction that could compel the ride-hailing companies to classify drivers as employees immediately. Uber and Lyft Get Reprieve After Threatening to Shut Down The companies, under legal pressure to reclassify their California drivers as employees, said they … A reclassification of their workers would represent a radical shift forced on the two businesses. But if their appeal fails, Uber may have to close up shop in California, Khosrowshahi said. Uber may shut down its operations in California, one of its largest markets in the US, if it is forced to classify drivers as employees, the company’s CEO Dara Khosrowshahi said on … The businesses’ exit from the Golden State will leave hundreds of thousands of drivers unemployed and millions of Californians chasing an expensive cab. Making the drivers contractors rather than employees has meant they are not entitled to benefits like minimum wage, overtime pay, workers' compensation, unemployment insurance and paid sick leave. Disclaimer. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. In it, the company states: Because Uber will almost certainly need to shut down the Rides app while it builds these departments and systems, millions of drivers who use the app to earn vital income will likely lose that opportunity the day the injunction goes into effect—and that source of income will be lost for months, at least. The company is appealing a court decision that would define its drivers as full-time employees. Uber's CEO says they may shut down rideshare operations in California for several months. All times are ET. Uber said it's appealing the decision. AB5, which was signed into law last September, enshrines the so-called “ABC test” to determine if someone is a contractor or an employee. In his ruling in favor of Becerra’s preliminary injunction, Superior Court Judge Ethan Schulman said Uber and Lyft’s arguments — that drivers’ work is outside the companies’ usual course of business — “flies in the face of economic reality and common sense.”. of Uber. 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