Legal Battles Ensnare Lyft and Uber
Ongoing labor disputes in California have threatened to dramatically undermine the viability of popular ridesharing services Lyft and Uber. Following the announcement of new regulations originally slated to be put into full effect last Friday which would have required Lyft and Uber to treat drivers as employees rather than independent contractors, both companies threatened to shut down their operations entirely. This threat was based in large part of the companies’ assertions that it would be impossible to smoothly transition their drivers to employee status in such a short amount of time.
According to Uber’s CEO, the reason for threatening this shutdown was due primarily to the fact that the company cannot fiscally support the hiring of 50,000 drivers in such a short amount of time.
Moving Ahead With Appeals
A state appeals court has now ruled that both companies can continue to operate with drivers regarded as independent contractors during the appeals process. Although this, by no means, should be regarded as a “victory” for Uber and Lyft, it nevertheless grants them a critical stay that will ensure their operations move ahead smoothly.
Given the fact that the state of California accounts for nearly 9% of Uber’s global rides, it is obvious why the company has such a vested interest in the final outcome of this case. Had Uber and Lyft ceased operations, it would have also been a staggering blow to a local economy that has already been heavily damaged by COVID-19.
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