SAN FRANCISCO (KRON) – Uber says it will likely be forced to shut down operations in California for several months if it is required to classify drivers as full-time employees.
In an interview Wednesday on MSNBC, Uber CEO Dara Khosrowshahi said if the court does not overturn its recent ruling, “it’s hard to believe we’ll be able to switch our model to full-time employment quickly.”
Both Uber and Lyft have just days left to appeal a preliminary injunction granted by a California judge Monday that ordered both ride-hailing giants to treat their California drivers as employees instead of independent contractors.
That shift would guarantee benefits like overtime, sick leave, and unemployment for employees who make up much of the gig economy.
The lawsuit was filed by California Attorney General Xavier Becerra and the city attorneys of Los Angeles, San Diego and San Francisco under a new California law that says companies can only classify workers as contractors if they perform work “outside the usual course” of their business.
Lawyers for Uber and Lyft say drivers are not fundamental to the business, arguing the companies are “multi-sided platforms” whose activities encompass much more than transportation.
This is a developing story. Check back for updates.