The CEO of ride-hailing app Lyft has threatened to shut down service in California, joining a similar warning issued earlier this week by competition firm Uber.
Threats to shutdown services in the state come after a San Francisco Superior Court judge ruled earlier this week that Uber and Lyft must classify drivers as employees, not contractors. independence. The ruling follows an attempt by California officials to get companies to comply with Council Proposition 5, which enforces more restrictions on employee classification.
Lyft CEO John Zimmer said Wednesday in a call with investors that the company may be out of business for reasons similar to Uber cited.
“If our efforts here fail, it will force us to suspend operations in California. Fortunately, California voters can listen to their voices by voting yes on Proposition 22 in November, ”Zimmer said in the call, according to CNBC.
The judge allows 10-day stay on the verdict, and Uber and Lyft said they plan to appeal.
Companies are also backing a measure that will appear in the California vote in November, exempting gigs, such as Uber and Lyft, from Board Proposition 5.
Uber CEO Dara Khosrowshahi said Wednesday on MSNBC that he hopes the court will delay decisions until after the election. If not, he said the company would be forced to discontinue service for at least three months.
“We think we are in compliance with the law, but if the court finds out that we’re not in compliance and they won’t let us stay until November, then we will essentially have to shut Uber down for until November when the voters decide, ”he said.