The company was recently ordered to classify drivers as employees.
Lyft announced that it will suspend its ridesharing operations in the state of California starting Thursday night.
The dramatic move comes after a California judge said last week that Lyft and Uber cannot classify their drivers as independent contractors instead of employees.
The employee classification means that the drivers will be provided with sick leave, overtime pay and other benefits.
“This is not something we wanted to do, as we know millions of Californians depend on Lyft for daily, essential trips,” the company said in blog post on Thursday. “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.”
In the post, the company argued that most drivers want the flexibility that comes with independent contractor status and the changes would “necessitate an overhaul of the entire business model” saying “it’s not a switch that can be flipped overnight.”
The company also urged customers to vote on a November ballot measure backed by Lyft and Uber that would allow app-based drivers to be classified as independent contractors instead of employees.
This is a developing story. Please check back for updates.
