Uber CEO Dara Khosrowshahi Says the Car Ride Service May Shut Down Temporarily in California

The shutdown may last for temporarily or for several months if the court does not rule in Uber’s favor. Uber and competing Lyft have one week to appeal a preliminary injunction granted by the judge in California on Monday. This injunction will prohibit companies  such as Uber and Lyft from continuing to allow then to classify themselves as independent workers.

The advantage for Uber classifying their employees as independent there’s means that they don’t have to pay benefits as if they were full-time employees .California lawmakers passed a landmark bill that  reshape how companies like Uber and Lyft do business. The legislation, known as Assembly Bill 5 (AB5)



SECTION 1. The Legislature finds and declares all of the following:

(a) On April 30, 2018, the California Supreme Court issued a unanimous decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex).

(b) In its decision, the Court cited the harm to misclassified workers who lose significant workplace protections, the unfairness to employers who must compete with companies that misclassify, and the loss to the state of needed revenue from companies that use misclassification to avoid obligations such as payment of payroll taxes, payment of premiums for workers’ compensation, Social Security, unemployment, and disability insurance.

(c) The misclassification of workers as independent contractors has been a significant factor in the erosion of the middle class and the rise in income inequality.

(d) It is the intent of the Legislature in enacting this act to include provisions that would codify the decision of the California Supreme Court in Dynamex and would clarify the decision’s application in state law.

(e) It is also the intent of the Legislature in enacting this act to ensure workers who are currently exploited by being misclassified as independent contractors instead of recognized as employees have the basic rights and protections they deserve under the law, including a minimum wage, workers’ compensation if they are injured on the job, unemployment insurance, paid sick leave, and paid family leave. By codifying the California Supreme Court’s landmark, unanimous Dynamex decision, this act restores these important protections to potentially several million workers who have been denied these basic workplace rights that all employees are entitled to under the law. Source Legislative.gov

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