Uber CEO: Will Shut Down In California Until Voters Decide

• We will have to essentially shut down Uber until the voters decide.
• Reclassifying drivers from contractors to employees is unfortunate.
• You would just get a much smaller service at much higher prices.
• The vast majority of our drivers don’t want to be full-time workers.
• Really unfortunate at a historical time of unemployment in California.
• It would put vast swaths of our drivers out of work.
• It would take away transportation from hundreds of thousands of Californians.
• Our labor laws are hopelessly outdated.
• It’s essentially how Uber started, kind of a black car service with few cars. 
• We can’t go out and hire ten of thousands of people directly overnight.
• We would focus on the center of cities versus smaller cities or suburbs.

“We think the ruling by a California judge was unfortunate on reclassifying drivers from contractors to employees,” says Uber CEO Dara Khosrowshahi. “We think we (already) comply with the laws. But if the judge and a court finds that we are not and they don’t give us a stay to get to November then we will have to essentially shut down Uber until the voters decide.”

Dara Khosrowshahi, CEO of Uber, discusses a court ruling requiring Uber to classify Uber drivers as full-time workers. Khosrowshahi says that this will force Uber to become a much small black car service focused on city centers and with much higher prices for rides. Essentially the service would no longer exist in California suburbs and rural areas:

Vast Majority of Uber Drivers Want To Remain As Contractors

We think the ruling (in California) was unfortunate (on reclassifying drivers from contractors to employees). We obviously respect the law and the judge. We do have about eight days now where there is a stay. We are going to go back to the court and appeal the ruling and hope that the court reconsiders. If the court doesn’t reconsider then in California, it’s hard to believe we will be able to switch our model to full-time employment quickly, so I think Uber will shut down for a while. Really, the big question is in November with Prop. 22, we have a proposition out there that puts forward what we believe is the best of both worlds.

The vast majority of our drivers, a 4-1 ratio, want flexibility, and don’t want to be full-time workers. With Prop. 22 drivers can continue to have the flexibility that they have but they can enjoy the protections, benefit fund, an earning standard so that they have the protections that many people associate with full-time work. We are hoping that in November the California voters can speak. We are confident that this better way which is kind of the best of both worlds will be the way going forward for California.

We Will Shut Down Until The Voters Decide In November

In California, we have changed our model substantially. For example, riders in California pay drivers directly. Drivers can set their own price as an independent contractor would. Drivers have all the flexibility to decide whether or not they want to take a ride or not. We think we (already) comply with the laws. But if the judge and a court finds that we are not and they don’t give us a stay to get to November then we will have to essentially shut down Uber until the voters decide.

It would be really unfortunate at a historical time of unemployment in California. It would put vast swaths of our drivers out of work without the opportunity to earn. It would take away transportation from hundreds of thousands of Californians. It would be really really unfortunate. Obviously we would look to comply with the law long-term and we’re hoping the law gives us the best of both worlds. Our labor laws are hopelessly outdated. You’ve got the haves and have-nots and you can have actually a better way.

Smaller Service, Higher Prices, Only Focused On Big City Centers

Hopefully, the courts will reconsider. By no means do we want this to happen. If they don’t we are going to have to work to move to a full-time model. It’s essentially how Uber started, kind of a black car service with very few cars on the road and much higher prices. So we will look to flip to a full-time model but this is a model that we built over ten years. We can’t go out and hire ten of thousands of people directly overnight. It would take a significant amount of time to switch over. We have teams thinking about it and working on it. We don’t think it’s the likely outcome by the way and we would look to get back on the road as quickly as possible.

You would just get a much smaller service, much higher prices, and probably a service that’s focused on the center of cities versus a bunch of the smaller cities or the suburbs that we operate in right now. That’s the reality. It’s not a game of chicken or one way or the other. It’s really up to the courts and we are going to comply with the law. We will look to get going but it will be a very very different service once we get going.