Uber: Rideshare service in California may be temporarily put on pause over AB5

Posted at 11:36 AM, Aug 12, 2020
and last updated 2020-08-12 14:36:08-04

(KGTV) -- Rideshare company Uber may temporarily put its operations in California on pause in light of its challenge of a state bill that reclassifies its drivers as employees.

Earlier this week, a judge sided against Uber’s challenge to Assembly Bill 5. Under the bill, Uber will be forced to provide reclassified drivers with employee benefits such as health care and paid time off.

Uber has previously said AB5, authored by San Diego-based state Assemblywoman Lorena Gonzalez, limits its drivers’ flexibility and puts a financial strain on the company.

In an interview with MSNBC on Wednesday, Uber CEO Dara Khosrowshahi said the company’s fight against the bill may put its rideshare service in California on hold until November, when ballots come in on Proposition 22, a measure that would classify drivers as contractors.

“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,” Khosrowshahi told MSNBC’s Stephanie Ruhle.

Uber and fellow rideshare company Lyft both said they would appeal the judge’s ruling, which takes effect Aug. 20.