Uber could shut down in California for several months if a court does not overturn a recent ruling requiring the ride-hailing company to treat its drivers as employees, chief executive Dara Khosrowshahi said on Wednesday.
A San Francisco Superior Court judge issued the ruling on Monday, finding that Uber and Lyft had misclassified drivers as independent contractors. Both companies said they would appeal during the 10-day period before it goes into effect.
“We think we comply by the laws, but if the judge and the court finds that we’re not and they don’t give us a stay to get to November, then we’ll have to essentially shut down Uber until November,” Khosrowshahi told MSNBC.
He said that would be “really unfortunate at a historical time of unemployment in California,” the most populous US state and one of Uber’s key markets. “It would put vast swaths of our drivers out of work.”
In November, California voters are to decide if drivers for transportation apps should be exempt from being considered employees.
If they reject that, Uber would have to move to a “full-time model,” which would result in a “much smaller service, much higher prices” and a focus on city centres, its chief said.
The employment status of drivers of gig-economy apps has long been debated, with Uber arguing that most drivers prefer flexibility over being considered full-time employees. But critics note that contractors lack rights such as health and unemployment benefits.