Image: Flickr/Minneapolis Public Works
On Thursday, Lyft announced that it would be suspending ride-hailing operations in California effective 11:59 PT.
The move follows threats from the company and its competitor Uber to temporarily exit California after a judge ruled that the companies must classify drivers as employees. The companies were awaiting a decision on an appeal, which Lyft’s blog makes no mention of.
In a blog post, Lyft pointed the finger at politicians and said it would continue to push for alternatives to classifying drivers as employees.
“At 11:59PM PT today our rideshare operations in California will be suspended,” Lyft’s blog post said. “This is not something we wanted to do, as we know millions of Californians depend on Lyft for daily, essential trips. We’re personally reaching out to riders and drivers to share more about why this is happening, what you can do about it, and to provide some transportation alternatives.”
Lyft’s blog post argues that reclassification is not “a switch that can be flipped overnight.” Under California law, drivers have been employees since a 2018 California Supreme Court decision and explicitly since Assembly Bill 5—which codified the decision—went into effect at the start of this year.
Lyft’s ride-hailing operations have been hit hard by the pandemic, with its second quarter earnings report showing that rides were down nationwide by nearly 60 percent, revenue down by over 50 percent compared to the same time last year, and even larger losses.
Lyft has an estimated 350,000 drivers in California, choosing to rather leave its workforce without a source of income in the midst of a pandemic and record unemployment instead of abide by the law.
Uber did not immediately respond to Motherboard’s request for comment. A Lyft spokesperson pointed Motherboard to its blog post.
Also on Thursday, a coalition of driver advocacy groups in California are holding a statewide day of action to protest efforts by Uber and Lyft to suspend operations, instead of comply with California law and provide drivers with a minimum wage, benefits, and protections associated with employee status.