Uber sends ominous message to riders in California ahead of its possible shutdown

• Uber warned California customers of its possible shutdown in a push alert message Tuesday night.
• The notification linked to a blog post explaining the labor dispute and its ballot proposal.
• If a judge doesn't grant Uber and Lyft's request for a stay in a decision from last week, the apps could shut down Thursday night.

Uber had a dire message for its customers in California Tuesday night.

"Ridesharing in CA may be suspended," the company said in a push alert via its app. The message comes less than two days before Uber and Lyft are expected to temporarily shut down their ride-hailing services in the state as a long-running labor dispute reaches a breaking point.

In a blog post linked to the notification, Uber warned users about the decision by a state judge on Monday that sided with California's Attorney General in saying the companies must classify drivers as employees instead of contractors. The lawsuit, originally filed in May, cites a law passed in 2019 that codifies the contractor versus employee framework known as "AB5."

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In response, both Uber and Lyft asked for a 10-day stay in order to appeal. That ask was rejected, and now both companies have threatened to shut down in California within days if their appeal is not successful. The presiding judge, Ethan Schulman, called Uber and Lyft's actions so far a "prolonged and brazen refusal" to follow the new law.

"We know that riders rely on Uber to get around, and drivers rely on the Uber app to earn income," Uber said. "We wanted to let you know that this is a possibility, so you can plan accordingly."

The post also asked customers to support Proposition 22, a ballot measure that California voters will decide on in November as an alternative to the AB5 framework. If passed, Uber, Lyft, and other gig-work companies would pay into a pooled benefits fund in order to provide things like healthcare and paid time-off. Those benefits would follow a worker across different apps while preserving their much-loved flexibility that the companies say would be lost under AB5.

Drivers overwhelmingly prefer to remain contractors, under the current guidelines.

Gig Workers Rising, a labor group that has opposed Prop. 22 and long advocated for drivers to be considered employees, called the threat "heinous."

"Uber is going to try to lay the blame for this possible suspension on anybody and everybody but themselves," Shona Clarkson, an organizer for the group, said in a press release. "However, they've had over a year to obey the law. Like petulant babies, instead of doing so, they're trying to extort their workers and the people of California."

Pending any decision from an appellate judge before Thursday night, the odds of a shutdown are looking increasingly likely. Lyft told investors last week that California makes up about 16% of its total rides requests, but its business remains hobbled by the COVID-19 pandemic.

"Lyft cannot comply with the injunction at the flip of a switch," Lyft President John Zimmer said on an earnings conference call last week. "Reclassifying tens of thousands of self-employed drivers would be a significant challenge in normal times. And in the current pandemic environment, that would be nearly impossible."