Uber CEO says ride-sharing service may be forced to shut down in California because of AB 5
California Attorney General Xavier Becerra and a group of city attorneys filed a lawsuit against Uber and Lyft alleging that their designations of drivers violated state law, AB 5.
AB 5 was authored by Assemblywoman Lorena Gonzalez, and has killed thousands of jobs across various industries in the state. Gonzalez denies that fact, and continues to say people are better off as employees rather than independent contractors.
AB 5 forces companies to reclassify workers as employees if the worker’s tasks are a normal part of the company’s core business, and other things. Uber and Lyft have argued that they are simply a technology company, not a transportation company. Meaning, driving is not part of their core business, exempting them from the regulations of AB 5.
But, a San Francisco Superior Court Judge recently ruled that the ride-sharing companies Uber and Lyft must classify their drivers as employees.
Uber and Lyft both announced they plan to appeal the ruling.
During an interview on MSNBC, Uber CEO Dara Khosrowshahi, told Stephanie Ruhle that Uber “we think we comply by the laws, but if the judge and the court find that we’re not, and they don’t give us a stay to get to November, then we will have to essentially shut down Uber until November when the voters decide.”
Khosrowshahi continued to explain that “it would be really unfortunate at a historical time of unemployment in California. It would put vast swaths of our drivers out of work without the opportunity to earn. It would take away transportation from hundreds of thousands of Californians, so it would be really, really unfortunate.”
Assemblywoman Gonzalez has championed the judge’s ruling on Twitter.
San Diego Mayoral candidate, Assemblyman Todd Gloria, co-authored and supports the bill.