Update: Uber and Lyft will not be forced to shut down California operations tonight
UPDATE 8/20 11:50 a.m. PST: CNBC has reported that Uber and Lyft will likely not be shutting down Thursday night after all, as a California appeals court has granted the rideshare companies additional time to comply with a court order that mandates drivers be classified as employees, as opposed to contractors. Lyft is yet to announce whether it will reverse its decision to suspend service.
Lyft is officially suspending service in California at 11:59 p.m. PST Thursday. Uber and app-based food delivery services will likely follow suit.
Last week, a California court granted a preliminary injunction requiring ride-share apps to reclassify drivers as employees rather than independent contractors. The injunction is set to go into effect Friday, Aug. 21, and companies are choosing to end service in the state rather than comply with the order.
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"For multiple years, we’ve been advocating for a path to offer benefits to drivers who use the Lyft platform — including a minimum earnings guarantee and a health care subsidy — while maintaining the flexibility and control that independent contractors enjoy," Lyft wrote in a blog post. "We don’t want to suspend operations. We are going to keep up the fight for a benefits model that works for all drivers and our riders."
This injunction affects all app-based drivers. Although no other company has made a formal announcement yet, Uber is expected to follow in Lyft's footsteps.
Uber and Lyft say most drivers prefer working as independent contractors because of the flexibility and ability to set their own hours. However, officials suggest that this deprives them of traditional benefits like a minimum earnings guarantee and health insurance.
“We can’t go out and hire 50,000 people overnight,” Uber CEO Dara Khosrowshahi said on a podcast Wednesday. “Everything that we have built is based on this platform that... brings people who want transportation or delivery together. You can’t flip that overnight.”
Speaking with Eater, an Uber spokesperson said that the shutdown would only apply to the company’s rideshare business and that Uber Eats will continue operating as usual. However, DoorDash was recently sued by San Francisco’s district attorney for misclassifying workers so it’s possible that app-based delivery services will shut down soon as well.
Uber, Lyft and DoorDash, Instacart and Postmates are encouraging voters to support Proposition 22 in November. This would override the state's new labor law, Assembly Bill 5 (AB5), by classifying drivers and other gig economy workers as independent contractors.
California users will continue to be able to use the Lyft app for bike, scooter and car rentals.
Related: Frequent Uber or Lyft passenger? These credit cards are for you
This is a developing story and will be updated as more information becomes available.
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The Citi Premier’s 3 points per dollar spent across a wide range of popular categories is one of the more lucrative offerings in the world of points and miles. The Citi Premier comes with a $95 annual fee and is currently offering a solid sign up bonus of 80,000 points after you spend $4,000 on purchases within the first three months. It also has some valuable transfer partners to make the most of your rewards. Add in access to Citi Entertainment plus a $100 hotel credit for any single-stay hotel booking that exceeds $500 or more, excluding taxes and fees, booked through the Citi travel website, there are few reasons why the Citi Premier should not be in every traveler’s wallet.Pros
- Earns 3x points on restaurants, supermarkets, gas stations, air travel and hotels.
- $100 annual hotel savings benefit (on single hotel stay bookings of $500 or more, excluding taxes and fees, booked through thankyou.com)
- Points transfer to 16 airline programs, from JetBlue to Virgin Atlantic.
- World Elite Mastercard benefits, extended warranty, damage and theft protection.
Cons
- $95 annual fee
- Lacks travel protections that other travel rewards cards come with
- For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
- Earn 3 Points per $1 spent at Restaurants and Supermarkets
- Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
- Earn 1 Point per $1 spent on all other purchases
- Annual Hotel Savings Benefit
- 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
- No expiration and no limit to the amount of points you can earn with this card
- No Foreign Transaction Fees on purchases