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UPDATED! Lyft is Officially Stopping Rides in California at Midnight Tonight AVERTED

Updated: Aug 21, 2020 12:51
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Updated 12:30pm 8/20:

CA appeals court grants Uber and Lyft a temporary reprieve following threats to shut down in California.

The court extended the length of time Uber and Lyft will have to comply with an order requiring them to reclassify rideshare drivers as employees.  So for the time being it looks like Lyft will continue to operate.

“The stay will extend until Uber and Lyft’s appeals are resolved on the condition that they agree to a new timeline and procedure. If they do not, the stay will expire on Aug. 25 at 5 p.m. PT. One of those conditions is that the CEOs of Uber and Lyft both submit sworn statements confirming they’ve developed plans to comply with the preliminary injunction within 30 days of a ruling if the appeals court affirms the preliminary injunction and if Proposition 22, the ballot measure that would exempt the firms from AB5, fails to pass.” – CNBC

According to Lyft itself, they are halting rides in California effective tonight, 11:59PM, Aug 20th.  Which is incredible, it may be a political powerplay as well as temporary, but we will see, as of now Lyft is done in CA.   It all stems back to AB-5 legislation, forcing rideshare companies in CA to classify their contractors as employees.

Meanwhile, Lyft’s chief rival, Uber, is about to double its business in CA.

This is what you see when you login to Lyft on your phone now

Lyft’s motivations (read their reasons bellow) are not surprising, but shutting down completely, especially during a state emergency, when many people may need rides to escape forest fires, seems like a crazy move right now.

via Lyft:  “At 11:59PM PT today our rideshare operations in California will be suspended. This is not something we wanted to do, as we know millions of Californians depend on Lyft for daily, essential trips. We’re personally reaching out to riders and drivers to share more about why this is happening, what you can do about it, and to provide some transportation alternatives.

Why this is happening

For multiple years, we’ve been advocating for a path to offer benefits to drivers who use the Lyft platform — including a minimum earnings guarantee and a healthcare subsidy — while maintaining the flexibility and control that independent contractors enjoy. This is something drivers have told us over and over again that they want.

Instead, what Sacramento politicians are pushing is an employment model that 4 out of 5 drivers don’t support. This change would also necessitate an overhaul of the entire business model — it’s not a switch that can be flipped overnight.

In this new model that politicians are pushing:

  • Passengers would experience reduced service, especially in suburban and rural areas
  • 80% of drivers would lose work and the rest would have scheduled shifts, and capped hourly earnings.
  • Lower-income riders trying to make it to essential jobs and medical appointments would be faced with unaffordable prices (38% of Lyft rides in California begin or end in low-income areas that have few transit options already).

What we’re doing

We don’t want to suspend operations. We are going to keep up the fight for a benefits model that works for all drivers and our riders. We’ve spent hundreds of hours meeting with policymakers and labor leaders to craft an alternative proposal for drivers that includes a minimum earnings guarantee, mileage reimbursement, a health care subsidy, and occupational accident insurance, without the negative consequences.

What you can do

Your voice can help. A ballot measure this November, Prop 22, proposes the necessary changes to give drivers benefits and flexibility, while maintaining the rideshare model that helps you get where you need to go. We believe voters should decide. Please sign up to help today.

Thank you for being a part of the Lyft community. We will keep you updated as this situation develops.

You can find further information about the suspension and alternative transportation – From public transportation and airport shuttles, to bikes, scooters and rentals via the Lyft app – here.  “

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  1. Bay Area Person
    August 20, 2020 at 12:32 pm

    Oh please. You greedy little techies, stop pretending that this is our fault. Take some of those millions of dollars in venture capital and buy healthcare for your workers.

    I am so sick of hearing about how the poor widdle tech company has it so bad that they just NEED to screw their employees out of a living wage. Yet they have no problem paying themselves millions and millions for running a company that has never turned a profit, and never will.

    How many of us have seen Uber and Lyft drivers sleeping in their cars because they can’t afford housing? How many of us have walked past some smug rich white boy in a Lyft backpack who can’t bother with a mask?

    I’m over it. Good riddance to bad rubbish.

  2. Timi Covington
    August 21, 2020 at 5:27 pm

    I have been following this story closely. Ride sharing arose because there was a need and people willing to drive on the terms the share companies offered. Independent contractor relationships were key to the financial equation. Taxi drivers are independent contractors who own (or lease) their vehicles and essentially work for themselves. Obviously, providing lots of benefits is going to make ride sharing much more expensive and, in all likelihood, uncompetitive. Rates charged have been tested in the marketplace and already are optimized. Raising them further i going to put them above the willingness of many riders to pay. There are no company profits to distribute to the drivers. In fact, there are no profits at all yet since this is still a market in development. It should come as no surprise that the ride share cos. are unwilling to reclassify their workers if their business model do not support employees over independent contractors. What intelligent investor would put money into these companies now that the well-meaning but market messing public interest groups have succeeded in getting industry-killing laws passed. A lot of highly opinionated folks see this as a big vs little guy phenomenon. In fact, the laws as to what constitutes and independent contractor have evolved over time taking into account the interest of workers (as well as those that hire them). This is a classic example – like rent control – of government intrusion that is bad news for everyone in the long run. Most importantly, people wiling to drive for Uber or Lyft don’t have a lot of good options – otherwise they wouldn’t be ride share driving in the first place.. They’ll all be out of work. How does that help them?