Court Decision May Lead Uber to Shut Down in California

Commentary & Community

Court Decision May Lead Uber to Shut Down in California

This week, Uber CEO Dara Khosrowshahi said that the ride-sharing service may temporarily shut down in the wake of a court decision requiring the company to classify their drivers as employees.

 

A San Francisco Superior Court judge ruled that, under California law, Uber must stop treating its drivers as independent contractors. Instead, the judge said, the law requires that the company hire the drivers as employees and provide them with the various benefits and legal protections provided to employees.

 

This ruling comes in the wake of the enactment of AB 5 in California. That law put severe restrictions on how companies could use independent contractors. Supporters said it was necessary to crack down on unscrupulous companies that were trying to avoid paying workers benefits and higher wages. Opponents countered that it was the government meddling in arrangements that worked well for both employees and contractors.


With the law’s implementation, businesses have begun restructuring or ending their relationships with California independent contractors. If Uber does suspend its business in the state, that would affect a significant number of Californians who currently drive for the company.

 

Uber and other companies are backing a ballot initiative that would overturn AB 5. Uber said that unless the courts prevent the current ruling from going into effect, the company will cease operating in the state until the fate of the ballot initiative is known.

 

Do you think that the government should require Uber to treat its drivers as employees instead of as independent contractors?

Copyright © 2018 Votespotter Inc. All rights reserved.