Lyft follows Uber in exiting California if forced to comply with AB 5
Category: #business  | By Nikita Chaurasia  | Date: 2020-08-13 |
  • shareshare_icon
  • Twitter
  • Facebook
  • LinkedIn

Lyft follows Uber in exiting California if forced to comply with AB 5

John Zimmer, CEO of the American ride-hailing service Lyft, has recently threatened to shut down all operations in California, following the footsteps of its competitor Uber. This move comes along the heels of the lawsuit filed against the ridesharing companies in California for violating Assembly bill 5 or AB 5 which mandated gig economy companies to classify their independent contractors as employees.  

Reportedly, San Francisco’s Superior Court judge has granted a 10-day stay for the ruling. However, Uber and Lyft plan to appeal to revert the decision.

Zimmer stated that if that company suffers a court loss, it would have to shut down its services in California. On the bright side, voters can help them against the legal battle by voting for them on Prop 22 in November.

The companies are organizing a ballot to exempt gig companies from Assembly Bill 5, cite credible sources.

Dara Khosrowshahi, CEO of Uber, on Wednesday expressed that he hoped the court would withhold its decisions until after the election season, otherwise, the company would halt its service for a period of at least three months.

The company is going by all laws but if the court claims that it doesn’t, then Uber will remain inactive until November when the voters finally decide on the matter.

Earlier this week, Lyft reported a massive revenue decline of 61% for the period ending in June, closing at losses per share of 86 cents and revenue of USD 339 million. Conversely, the company recorded 78% increment in rides in July as compared to that of April this year.

Lyft did not disclose the details but said that its on route to turn in profit by next year on an adjusted basis in the fourth quarter of 2021. Although the company is recovering from the impacted garnered by the pandemic, the recent lawsuits and allegations are obstructing the growth.

Sources:

https://thehill.com/policy/technology/511786-lyft-joins-uber-in-threatening-to-shut-down-in-california-over-new-labor

https://www.cnbc.com/2020/08/12/lyft-earnings-q2-2020.html

  • shareshare_icon
  • Twitter
  • Facebook
  • LinkedIn


About Author

Nikita Chaurasia     twitter

Nikita Chaurasia

Having always been daft at wordplay, Nikita Chaurasia, post the completion of post-graduation, commenced her journey into the content generation cosmos. Endowed with a professional MBA degree in Advertising and Public Relations, Nikita strives to integrate her creativ...

Read More..

More News By Nikita Chaurasia

Fintech firm PayPal to shed around 2000 staff as global economy plummets

Fintech firm PayPal to shed around 2000 staff as global economy plummets

By Nikita Chaurasia

PayPal, the U.S.-based fintech giant, has reportedly announced that it will cut nearly 2000 jobs, approximately 7% of its workforce, as it turns the latest prominent tech company to shed staff in a bid to cut costs. The online payments provider cl...

EasyJet sees a rise in bookings as customers plan their next vacations

EasyJet sees a rise in bookings as customers plan their next vacations

By Nikita Chaurasia

British multinational low-cost airline group, EasyJet, has reported a record surge in bookings for the month of January as people prioritized their travel plans for the coming year. The news comes as airlines world over start to show signs that they&...

Dr. Reddy’s becomes India’s second biggest drugmaker by sales

Dr. Reddy’s becomes India’s second biggest drugmaker by sales

By Nikita Chaurasia

Dr. Reddy's Laboratories Ltd. and Cipla Ltd. surpassed Aurobindo Pharma to rank as the 2nd and 3rd largest drug manufacturers in India by sales in the three months that ended on September 30. This was the first change in the pecking order of the ...