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Uber CEO Says Its Service Will Probably Shut Down Temporarily in California if It’s Forced To Classify Drivers as Employees

Uber would likely shut down temporarily for several months if a court does not overturn a recent ruling requiring it to classify its drivers as full-time employees, CEO Dara Khosrowshahi said in an interview. From a report: “If the court doesn’t reconsider, then in California, it’s hard to believe we’ll be able to switch our model to full-time employment quickly,” Khosrowshahi said. Uber and rival Lyft both have about a week left to appeal a preliminary injunction granted by a California judge on Monday that will prohibit the companies from continuing to classify their drivers as independent workers. Following the order will require Uber and Lyft to provide benefits and unemployment insurance for workers.

California’s attorney general and three city attorneys brought the lawsuit against the companies under the state’s new law, Assembly Bill 5, that aims to provide benefits to gig workers core to a company’s business by classifying them as employees. In his decision granting the preliminary injunction, the judge rejected the notion that drivers should be considered outside the course of the companies’ businesses, calling the logic “a classic example of circular reasoning.”

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