Lyft almost suspended its services in California
Lyft has just announced that it is suspending its ridesharing operations in California today at 11:59PM PT.
The ridesharing company claims that this is a result of Sacramento politicians "pushing an employment model that 4 out of 5 drivers don’t support," that would result in the following:
Passengers would experience reduced service, especially in suburban and rural areas
80% of drivers would lose work and the rest would have scheduled shifts, and capped hourly earnings.
Lower-income riders trying to make it to essential jobs and medical appointments would be faced with unaffordable prices (38% of Lyft rides in California begin or end in low-income areas that have few transit options already).
Instead of complying, Lyft is choosing to end its service.
Uber has also announced that it will end its services at the end of the day -- although it has yet to officially confirm it. The Verge has reported that although a company spokesperson has declined to comment, they have shared a Medium article that argues Uber has been an essential service throughout the pandemic.
Back in January, California made major changes to its AB5 law that limited the use of independent contractors after unions and officials complained that the current model deprives workers of traditional benefits. As a result, Uber and Lyft have been under immense pressure to change their business models in California. Meanwhile, the ridesharing companies have argued that drivers "prefer the flexibility of working as freelancers".
This is an industry that is vital to the income and livelihood of millions. And just like the Apple vs. Epic battle earlier this week that left indie developers hanging in the crossfire, it will be drivers who suffer the consequences. It's only a matter of time until this hits DoorDash, Grubhub, and Postmates.
Combined, there are almost 2 million Uber and Lyft drivers in the United States. If something is not done quickly, the effects of this could ripple across the rest of the country.
Update: The appeals court has since blocked the order, which means that Uber and Lyft can continue to operate while the appeals process plays out.
“We are glad that the Court of Appeals recognized the important questions raised in this case, and that access to these critical services won’t be cut off while we continue to advocate for drivers’ ability to work with the freedom they want,” a spokesperson from Uber told The Verge.
A Lyft spokesperson said, “While we won’t have to suspend operations tonight, we do need to continue fighting for independence plus benefits for drivers."
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