Uber Faced The Issue Of Ending Operations In Its Native California
Uber Technologies Inc may be forced to stop operating a taxi service in its home state of California after a court ruling that taxi drivers here should be considered employees of the company, Uber Chief Executive Dara Khosrowshahi said.
"It's hard to imagine that we can quickly change our model" in terms of changing the role of drivers, Khosrowshahi said, speaking on MSNBC.
On Monday, the court ruled that Uber and rival Lyft must classify drivers as their employees. The lawsuit against the services was filed by a group of California prosecutors who accused Uber and Lyft of violating the state's law on independent contractors. According to this law, companies belonging to the so-called free earnings economy (gig economy) must comply with certain conditions. Independent contractors, in particular, cannot perform work that is part of the company's core business.
Uber and Lyft, in turn, claim that they are not the transport companies, but developers of platforms for ordering taxis.
The court delayed the decision's entry into force for ten days so that the companies would have time to appeal it.
Uber attracts more than 200 thousand drivers to work in California, Lyft – 325 thousand.
Uber shares fell 1.3% in trading on Wednesday. Since the beginning of this year, their cost has increased by 3.5%.