Uber, Lyft threaten to shut down in California after injunction forces gig companies to reclassify workers
Uber and Lyft are threatening to cease operations in California - one of their largest markets - due to an August 10th injunction that is requiring the companies to abide by Assembly Bill 5's mandate to classify gig workers as employees by August 20th. The University of California at Berkeley's Labor Center reported in May that had Lyft and Uber classified their drivers as employees, over $413 million would have been contributed by the companies towards the state's unemployment funds. California, like many other states in the U.S., is currently struggling to fund unemployment insurance as claims continue to number around a million a week. While ride share drivers have seen their business drop during the pandemic, they were forced to continue working because as independent contractors, they were not initially eligible for unemployment (the government has since agreed to pay them benefits). The drivers continue to go without health insurance or paid sick leave.
See "Uber, Lyft threaten to shut down in California after injunction forces gig companies to reclassify workers", Michael Sainato, The Guardian, August 20, 2020