Aug 13, 2020 10:49:00

What is the reason why Uber faces a crisis that requires temporary suspension of business?

On 10th August 2020, local time, the California High Court of America

issued an order to Uber and Lyft, a dispatch service, to 'classify drivers as employees.' Uber CEO Dara Kosroshahi said the company's operations in California would have to be closed unless the court withdrew the order.

Uber may shut down temporarily in California
https://www.cnbc.com/2020/08/12/uber-may-shut-down-temporarily-in-california.html

Uber may shut down in California if forced to classify drivers as employees, CEO says-The Verge
https://www.theverge.com/2020/8/12/21364929/uber-california-shutdown-appeal-court-ruling-drivers

Vehicle dispatching services such as Uber and Lyft classify drivers who transport users to their destinations as independent contractors, not as company employees. Uber and Lyft argue that making the driver an independent contractor gives the driver the flexibility to set their own working hours, which is why the scheme is widely accepted.

However, trade unions and politicians have complained that the dispatch service has left the driver with health insurance and compensation by making the driver an independent contractor. In May 2020, California Attorney General Xavier Besera, along with lawyers from cities such as Los Angeles, San Francisco, and San Diego, independently contracted drivers under UAB and Lyft under the '

AB5 Law, ' a state law that protects gigworkers. I have filed a lawsuit that I should employ as an employee rather than a trader.

Attorney General Becera filed a petition for a preliminary injunction that could force Uber and Lyft to immediately employ the driver as an employee. Uber and Lyft alleged that 'working as a driver is outside the company's normal business', but the California High Court rejected Uber and Lyft's allegations and ordered the driver to be classified as an employee. I did it.

Uber and Lyft are ordered by the court to treat drivers as employees-GIGAZINE

by Stock Catalog

Uber and Lyft are given 10 days to appeal, but Kosloshahi told MSNBC News, 'Without reviewing orders, we can quickly switch to full-time employment in California. I don't think so.'

Foreign media The Verge asked Uber and Lyft to comment on this decision, but no response was received at the time of writing the article.

In addition, even in the allegation filed by Uber on August 10, 2020, the possibility of having to stop the business was mentioned, ``When Uber hires a driver as an employee, Millions of drivers earning significant revenue from using the app will spend at least a few days from the date the injunction comes into force, as they will almost certainly have to shut down the app while building the system. You'll lose your income for the month,' he said, this order could impact everyone working as a driver at Uber.