Uber Might Temporarily Shut Down Its California Operations
In California, a recent ruling that classifies its drivers as full-time employees might force Uber to shut down its ride-hailing app if the court doesn’t overturn its decision said Dara Khosrowshahi in an interview with MSNBC.
Khosrowshahi also said “It’s hard to believe we’ll be able to switch our model to full-time employment quickly,” noting that this will force them to shut down temporarily. After the court’s ruling, Uber has filed the same request stating the same words on Tuesday.
Reportedly, the shares of the company were down by 1.4% in midday trading.
On Monday, Ethan Schulman, Judge in California Superior Court, passed a ruling that granted a preliminary injunction forcing Uber and Lyft to classify its drivers as employees.
The judge has acknowledged that the ruling will change the nature of business practices for Uber and Lyft in significant ways and implementing the injunction will come at a cost.
Also Read: New Ruling By Judge Of San Francisco Superior Court Forces Uber And Lyft To Classifying Driver As Employees
But, according to the court, such hardships weren’t enough to sway them from classifying drivers as employees. This decision will not just provide them the status of employees but also force the companies to provide them with unemployment insurance and other employee benefits.
In the motion filed, filed on Tuesday, Uber’s attorneys have requested the Court of Appeals makes its decision and that an injunction should have stayed.
Attorneys argued that “Uber will almost certainly be forced to shut off the Rides platform in California if the injunction goes into effect, which would irreparably harm Uber and all who rely on its Rides app to generate income for them and their families — particularly in the midst of a pandemic.”