Uber CEO stresses the firm may have to pull the plug on services in California after employee ruling

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Uber CEO Dara Khosrowshahi has stressed the firm would probably have to stop operating in California if the recent driver employee ruling is not overturned.

California Attorney General Xavier Becerra — alongside the City Attorneys of Los Angeles, San Diego, and San Francisco — secured a preliminary injunction against unlawful employee misclassification by Uber and Lyft on 10 August, requiring the companies to rightfully classify their drivers as employees while litigation is ongoing.

The decision has been considered a huge blow for both companies, with Khosrowshahi saying in an interview with MSNBC: “If the court doesn’t reconsider, then in California, it’s hard to believe we‘ll be able to switch our model to full-time employment quickly.”

Following the court ruling, Attorney General Becerra, said: “The court has weighed in and agreed: Uber and Lyft need to put a stop to unlawful misclassification of their drivers while our litigation continues."

Los Angeles City Attorney Mike Fryer, added: “While this fight still has a long way to go, we’re pushing ahead to make sure the people of California get the workplace protections they deserve.

"Our state and workers shouldn’t have to foot the bill when big businesses try to skip out on their responsibilities. We’re going to keep working to make sure Uber and Lyft play by the rules.

"Of course, our fight is not over and we will vigorously pursue this litigation until these workers have the permanent protection they deserve."

San Francisco City Attorney, Dennis Herrera, concluded: "Misclassification hurts drivers and it puts the burden on taxpayers to pay for benefits that Uber and Lyft should be providing.

“These companies have pocketed millions of dollars by leaving taxpayers to foot the bill.

"That’s unacceptable. During this global pandemic, it’s even more important for drivers to get access to protections like unemployment insurance. There is no rule that prevents these drivers from continuing to have all of the flexibility they currently enjoy. Being properly classified as an employee doesn't change that.”