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Uber, Lyft Threaten to Stop Service in Calif.

Newser — Rob Quinn

Uber and Lyft are threatening to halt service in California over an order requiring them to start treating drivers like employees instead of contractors and provide benefits including sick pay.

The order was issued Monday by a San Francisco Superior Court judge who granted a request from California Attorney General Xavier Becarra, Politico reports. The order came with a 10-day stay for the companies to appeal, and Uber CEO Dara Khosrowshahi says that if appeals fail, the company could stop service until November, when voters will weigh in on an Uber and Lyft-backed ballot initiative that would allow the company to continue treating drivers as contractors.

"We think we comply by the laws, but if the judge and the court finds that we're not and they don't give us a stay to get to November then we'll have to essentially shut down Uber until November when the voters decide," Khosrowshahi told MSNBC.

Lyft president John Zimmer made similar remarks during a Wednesday earnings call, reports the San Francisco Chronicle. In the Monday ruling, Judge Ethan P. Schulman rejected the argument that Lyft and Uber can classify drivers as contractors under California's new gig-worker laws because their work is performed "outside the usual course" of business, the AP reports.

"To state the obvious, drivers are central, not tangential, to Uber and Lyft's entire ride-hailing business," Schulman wrote.(Khosrowshahi is calling for a "third way" for Uber drivers.)

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