Lyft to suspend ride-hailing in California – CNET [CNET]

Lyft will suspend its ride-hailing service in California on Thursday following a court order in the state — likely its largest market — that requires it and rival Uber to reclassify drivers as employees. 

“As a result of a court order, we’ll be suspending rideshare throughout California at 11:59 PM PT on Thursday, August 20,” the company said in an update on its website. “We did everything we could to prevent this from happening and keep Lyft available for you, but it wasn’t possible to overhaul our business model and operations in ten days.”

Judge Ethan Schulman of the San Francisco Superior Court ruled on Aug. 10 that the ride-hailing companies must start classifying their drivers as employees in the state. The judge said the injunction against the companies wouldn’t be enforced for 10 days to give them a chance to appeal — something both companies said they’re doing. 

The injunction is part of a lawsuit against Uber and Lyft filed by the state of California in May. The suit says the companies “exploited hundreds of thousands of California workers” by classifying drivers as independent contractors and are violating California’s AB 5 law on worker classification, which took effect in January.

See also: Uber vs. Lyft: We compare the two ride-hailing apps

Uber and Lyft classify their drivers as independent contractors, which means the workers pay their own expenses, such as gas, car maintenance and insurance. Drivers also don’t have labor benefits like minimum wage, health insurance or paid sick leave. If they were to be classified as employees, many of those costs would then fall on the companies.

Both Lyft and Uber said last week that if California forces them to classify their drivers as employees, they’ll suspend operations in the state. 

Lyft noted on its website that people can still use the Lyft app to access bikes, scooters, car rentals and public transit information.

In a blog post on Thursday, Lyft also urged people in California to support a ballot measure that the companies are backing called Proposition 22. In all, Uber and Lyft — along with Doordash, Postmates and Instacart — have put $110 million behind the measure. The proposition, which will be up for vote in November, seeks to exempt the gig economy companies from AB 5.

Uber didn’t immediately respond to a request for comment. 

CNET’s Dara Kerr contributed to this report.