LYFT’s co-founder and President John Zimmer said in a conference call on the company’s second quarter earnings that LYFT could suspend business in California if it failed to overturn a recent court ruling. The court ruling required the company to classify drivers as full-time employees. LYFT’s shares rose 6% in after hours, but fell after Zimmer said it might suspend business in California.
in addition, Uber chief executive Dara khosrowshahi said on Wednesday that if the ruling is not overturned, Uber may also suspend business in California. Kosloshahi said the suspension could last until November, when voters will vote on proposition 22. The proposal exempts Internet taxi and express companies from having to treat drivers as regular employees.
Zimmer stressed the importance of proposition 22 on the company’s earnings call on Wednesday. “If the bill fails, we will be forced to suspend business in California,” he said. But fortunately, California voters can choose to voice their voices in November and vote for bill 22. ”
on Monday, a California judge approved an injunction requiring LYFT and Uber to stop classifying drivers as individual employees within 10 days. Both companies said they would appeal the ruling. Under the ban, LYFT and Uber are required to treat their drivers as regular employees and pay them extra costs such as benefits and unemployment insurance.
in May, Xavier Becerra, California’s attorney general, and three lawyers sued the two companies, accusing them of violating a new state law. The law aims to protect the social welfare of workers in the “casual economy”. Uber and LYFT have been opposed to the law. Both companies have funded the above-mentioned proposal No.22, and if the proposal is finally approved, the two companies will be released from the relevant legal liabilities.
Uber’s kosloshahi recently began to advocate the so-called “third way” of classifying workers. In his opinion, there should be a way to allow casual workers to enjoy the flexibility of working independently, and at the same time, they can also get some legal protection only for regular employees. According to the working hours of the employees, the employees can be paid by the insurance fund. But LYFT’s leadership has yet to take a positive stance in this regard.