Skip to main content

Uber might shut down its app in California over how employees are classified

Uber may shut down its app in California for “several months” if the company has to classify drivers as independent workers. 

Following a preliminary injunction granted on Monday that requires Uber and Lyft to stop classifying their drivers in California as contractors instead of employees by next week, Uber CEO Dara Khosrowshahi, said that the app would have to be shut down there as a result. 

“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 said during a Wednesday interview on MSNBC. 

Uber CEO Dara Khosrowshahi
Justin Sullivan / Getty Images

The two companies have one week to appeal the preliminary injunction, which both have said they plan to do, according to CNBC. The new order would require Uber and Lyft to treat their California drivers as employees, including providing benefits and insurance. 

The preliminary injunction resulted from a lawsuit California Attorney General Xavier Becerra filed against the ridesharing apps in May over their alleged misclassification of their workers as independent contractors instead of as employees. The lawsuit seeks up to $2,500 for each violation, and a permanent halt to misclassifying drivers and civil penalties that could reach up to the hundreds of millions of dollars. 

Last September, a new gig economy law called Assembly Bill 5 was passed in California that requires app-based companies to treat their contractors the same way they treat regular employees. Under the new law, contractors are eligible for basic protections like minimum-wage requirements, health benefits, and Social Security. 

Both Uber and Lyft have been vocal about their opposition to the bill, and even joined forces with DoorDash in August 2019 on a $90 million ballot initiative to exempt them from Assembly Bill 5. Assembly Bill 5 officially went into law on January 1. 

Digital Trends reached out to Uber to comment on Khosrowshahi’s interview. We also reached out to Lyft to see if it would also shut down its app in California. We will update this story when we hear back. 

Editors' Recommendations

Allison Matyus
Former Digital Trends Contributor
Allison Matyus is a general news reporter at Digital Trends. She covers any and all tech news, including issues around social…
Marvel 1943: Rise of Hydra: release date window, trailers, gameplay, and more
Captain America and Black Panther clash in Marvel 1943: Rise of Hydra footage.

The superhero craze in gaming isn't slowing down as we await the first title from Skydance New Media, Marvel 1943: Rise of Hydra. This is one of two games to feature Black Panther, but this game, as the name spells out, is set in the past, during World War II. That, of course, can only mean Captain America will be the other major hero to show up. This is a very unique pairing we haven't seen in games before. Given the pedigree of Marvel and the talent at Skydance New Media, most notably Amy Hennig of Uncharted fame, there are some major expectations for this superhero romp. We won't waste time trying to cut off the Hydra's head and go straight to the heart of the matter with all the details we know so far.
Release date

The current release window for Marvel 1943: Rise of Hydra is 2025. We suspect it will be in the second half of the year, probably a fall release, but we can only speculate.
Platforms

Read more
Here’s more confirmation that 2024 will be a slow year for Macs
3nm iphone ipad processors apple silicon imgae

There's some extra reason to believe that Apple could already be working on the M4 chip, but it may not be coming for a while. New research from Canalys, a market analytics firm, shows that the next entry in the Apple Silicon family could come in the first part of 2025 to target offerings from Intel, Qualcomm, and AMD.

Lining up with previous reporting from Bloomberg's Mark Gurman, Canalys is estimating that Apple could launch the M4 chip in the first quarter of 2025. It's a vague time frame, but it makes a lot of sense. Gurman previously said that Apple already has the M4 MacBook Pro in "formal development." Although this timing lines up with previous Apple Silicon chip refresh cycles, it would leave 2024 looking fairly light in terms of new Mac releases. Apple usually has some kind of October or November release focused on new Macs, but without new chips to launch, that might not happen this year.

Read more
Watch SpaceX fire Starship’s Raptor engines ahead of 4th test flight
The Starship spacecraft during an engine test.

SpaceX performed a full-duration static fire of all six Raptor engines on its Starship spacecraft on Monday, and shared a video of the dramatic test on social media.

https://twitter.com/SpaceX/status/1772372482214801754

Read more