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Lyft to suspend service in California amid labor fight

Lyft will suspend its ride-hailing service in California at the end of the day Thursday, the company confirmed in a blog post.

Top executives at Lyft had suggested last week that the move was coming after a court granted a preliminary injunction requiring it and fellow ride-hailing company Uber to classify their drivers as employees.

The decision had been on hold for 10 days to give the companies a chance to appeal.

Uber’s CEO Dara Khosrowshahi has also threatened to suspend ride-hailing operations in the state, but no official announcement has been made.

San Francisco Superior Court Judge Ethan Schulman ruled last week that Uber and Lyft must classify their drivers as full employees under Assembly Bill 5, a landmark law in California that establishes a test for determining whether workers can be classified as independent contractors.

Schulman sided with California Attorney General Xavier Becerra (D), who brought the lawsuit after the two ride-sharing giants resisted the law after it took effect in January, arguing their core business is technology rather than ride-hailing.

Lyft and Uber still have one chance to avoid giving their workers basic protections like a minimum wage and the right to organize.

Both companies, along with other gig economy companies, have poured millions into Proposition 22, which would exempt them from the bill.

Although Proposition 22 would give some additional benefits to gig workers, the November ballot measure has faced strong pushback from drivers.

This is not the first time that ride-hailing companies have withheld their services in an effort to pressure local officials into watering down regulations, though the latest move comes amid broader economic turmoil caused by the coronavirus pandemic, with drivers set to be the most affected by a suspension of services.

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