This archive report was first published on 21 August 2020.
On August 21, 2020, a court order in California required Uber and Lyft to classify their drivers as employees, rather than freelancers or contractors.
The rideshare companies have responded by threatening to shut down their operations in California, one of their largest markets, if the court does not lift the order.
According to reports, Uber and Lyft plan to keep cars off the road until at least November, when voters weigh in on Proposition 22, a ballot initiative that aims to keep their workers as independent contractors.
However, the companies have announced that they will not halt operations for their delivery service, Eats, as the lawsuit did not specify drivers for that platform.
Uber's delivery orders have seen a significant surge, with more than double the orders in the second quarter compared to the previous year, as Americans rely on deliveries to avoid exposure to the coronavirus during the pandemic.
On the other hand, ride-hailing trips have taken a significant hit, with a 75% decline from last year, according to reports.
As a result, the company is considering a shift to a franchise model in California, where employment would be left to independent franchisees rather than Uber's corporate headquarters.
