Uber, Lyft prepare to shut down California rides service on Friday

California is absolutely dropping the ball with how it’s handling the classification of drivers for ride-share companies, and the overall gig economy as a whole.

Drivers for both companies work on their own hours, set their own schedules, and choose when they start/stop driving. The ride-share economy is a two-way marketplace: riders agree to the prices charged by the platform, and drivers agree their payment prior to accepting a ride. Riders are able to enjoy safe, affordable, and accessible transportation while drivers are able to earn income on a flexible schedule. Drivers should absolutely be treated as contractors; if they feel under-compensated, they can stop accepting rides on the platform. If enough drivers drop off the platform, companies will have to revisit their compensation structures.

By forcing companies to treat drivers as employees rather than allowing the free market to correct itself, California is hurting both consumers/workers, and pushing out Uber, Lyft, and other start-ups. Unless the state changes its approach to business, it will continue losing companies (+ jobs, tax revenue, and talent) to more business-friendly states like Texas, Colorado, and Florida.

What are your thoughts – Should drivers be classified as employees or contractors?

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