Uber likely to shut down in California for over a year if new ruling not overturned

From today’s NBC News Online:

In new court filings Wednesday, a top Uber official said the company would “almost certainly need to shut down” ride services in California for “likely more than a year” if a judge’s groundbreaking ruling issued this week is upheld on appeal.

In a new four-page declaration, Brad Rosenthal, Uber’s director of strategic operational initiatives, said that if the company has to reclassify the bulk of its workforce as employees rather than contractors, it will “force Uber to dramatically restructure its entire business model and its relationships with drivers and riders.”

In a call with investors Wednesday, Lyft CEO John Zimmer said the company would likely also suspend operations in the state for similar reasons.

Earlier Wednesday, Uber CEO Dara Khosrowshahi said the company would halt service in its home state of California for a few months if a judge’s groundbreaking ruling this week is upheld on appeal.

“We will have to shut down until November,” Khosrowshahi told MSNBC’s Stephanie Ruhle in an interview.

On Monday, Judge Ethan Schulman of the San Francisco County Superior Court found that there was an “overwhelming likelihood” that both Uber and Lyft had misclassified drivers as contractors rather than employees. Drivers make up the bulk of those companies’ labor forces.

The ruling was the latest twist in a lawsuit brought against the companies in May by the state’s attorney general. Schulman put a hold on enforcement of his ruling for 10 days pending appeal.

In the new filings, both companies asked the judge to at least extend this hold period beyond 10 days while they begin the appeals process. Schulman is set to hold a hearing on this issue Thursday.

Read the complete article here.