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In brief: Lyft on Thursday confirmed that at the end of today – at 11:59 p.m. Pacific, to be exact – the company will suspend all rideshare operations in the state of California. The move comes after months of uncertainty for freelancers in the Golden State.
Back in January, lawmakers in California enacted Assembly Bill 5 (AB5) which impacts how businesses in the state can classify independent contractors and freelancers. California Attorney General Xavier Becerra in May sued ridesharing providers Uber and Lyft over the matter and earlier this month, a judge sided with the state, putting the companies on the clock to make a change.
Lyft in announcing its decision said they have been advocating for a way to offer benefits to drivers while maintaining the independence that contractors enjoy. “Instead, what Sacramento politicians are pushing is an employment model that 4 out of 5 drivers don’t support,” the company added.
According to Lyft, under the proposed changes, 80 percent of drivers would lose work and others would see capped hourly earnings and scheduled shifts.
Simply put, Lyft said it’s the sort of change that can’t simply happen overnight, so they are having to suspend operations in California for now.
Uber is expected to make a similar announcement sometime today although as of this writing, nothing has been made official.