Last week, a judge granted the state's request for a preliminary injunction requiring Uber and Lyft to reclassify drivers as employees.
Uber and Lyft have a chance to avoid further legal action under AB5 with a ballot measure they're supporting in November. If voters support Proposition 22, Uber, Lyft and other app-based ride-hailing and food delivery services will be exempted from AB5. The measure also provides for additional benefits for gig workers at such services.
While a suspension could drum up support for the ballot measure if riders miss the services, it will also present the opportunity for competitors to swoop in. Two start-ups, Alto and Arcade City, have. Even existing services and taxi drivers could seize on the opportunity to gain back market share. Ridership across the board is already low, however, as travel has stalled during the coronavirus pandemic.
Still, a similar situation played out in Austin in 2016 when Uber and Lyft suspended service there over a new background check law they said would prolong their process of signing up drivers. While several new services took hold, the two giants regained much of their customer base when they returned after the state reversed the law.
In its blog post, Lyft encouraged voters to support Proposition 22 in November. It also said California residents could
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