Uber, Lyft threaten California shutdown over driver status

Earlier this month, San Francisco Superior Court Judge Ethan P. Schulman ordered Uber and Lyft to make the employment classification change for their California drivers, which would guarantee benefits like overtime, sick leave and expense reimbursement. That ruling doesnt affect Ubers growing Eats business, so regardless of what happens with the case, Uber will continue delivering food.

His decision followed a new California law aimed at companies that employ so-called gig workers. It says companies can only classify workers as contractors if they perform work outside the usual scope of their business. California Attorney General Xavier Becerra and several city attorneys sued Uber and Lyft, saying they were violating that law.

The ride-hailing companies have argued that theyre technology companies, not transportation companies, so drivers are not a core part of their business. They also vowed to spend more than a hundred million dollars to support a November ballot measure seeking to exempt them from the law.

California officials say treating drivers as contractors harms more than just drivers, since the companies dont contribute to the states dwindling unemployment insurance fund on the drivers behalf.

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