Why Uber and Lyft might shut down in California

Earlier this year, California passed a state law requiring rideshare companies like Uber and Lyft to reclassify their drivers as employees. Up until now, rideshare drivers have been classified as independent contractors. This has been advantageous to the rideshare companies who have been able to avoid paying for benefits like time off, health insurance, and retirement. The intent behind this new state law requiring re-classification is to bolster the position of workers all over the state.

Both Uber and Lyft have responded to this new regulation negatively, claiming that it threatens their entire business model. Enforcement of this new regulation is rapidly approaching, and, in response, both of these insanely popular rideshare companies are threatening to shut down operations in California until they can retool their business.

This is going to have a significant impact on both the state’s economy and the state’s roadway safety.

Uber alone has more than 36 million users and 2.6 million drivers within our state. More than 4 million Uber rides happen every day. If the application shuts down, the 2.6 million drivers will lose a significant income stream. According to Lyft records, full-time drivers in California make an average of $32,000 annually, which is enough to live on. This shut down could mean that full-time drivers will lose the ability to support themselves. Not too mention that 36 million riders will be stranded without a way to get around. Additionally, rideshares have become incredibly popular for nightlife. Instances of driving under the influence have decreased dramatically ever since rideshares have become ubiquitous in our society. Ceasing rideshare services runs the risk of intoxicated people getting behind the wheel again.

We will be monitoring the status of both of these rideshare companies closely. However, it is fundamental for both drivers and riders to understand that their rideshare practices might soon dramatically change. We urge everyone in our state to come up with alternate transportation and income source in case the worst happens, and rideshare services go on pause. If you believe you have grounds for a lawsuit either as a rideshare driver or a rideshare rider, contact Para Los Trabajadores to discuss the details of your situation. We are here to help in any way that we can.