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Uber Technologies Inc. on Monday said it will continue to operate its revenue-generating food delivery company Uber Eats, even if its ride-haul business is to be forced to sue in California by the end of this week.
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A company spokesman said Uber’s food delivery unit was not affected by a lawsuit filed by the California Attorney General’s and a subsequent court order that would force Uber to treat its ride-hail drivers as employees.
| Ticker | Security | Last | Change | Change% |
|---|---|---|---|---|
| UBER | UBER TECHNOLOGIES INC. | 29.48 | -0.51 | -1.70% |
| LIFT | LIFT INC. | 27.17 | -1.34 | -4,70% |
Uber and smaller rival Lyft Inc. said they will be forced to close their ride-hailing actions in California if the court ruling goes into effect Friday morning.
Eats has injured Uber during the pandemic, as Americans stay home and many businesses and restaurants remain closed. Delivery orders more than doubled in the second quarter, while travel bookings for ride-hailing, which in the past accounted for nearly two-thirds of Uber’s revenue, accounted for 75% of last year.
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California accounts for 9% of Uber’s global rides and Eats gross bookings, but a negative amount of adjusted profits before interest, taxes, depreciation and amortization, Uber said in November. Lyft, who only works in the U.S. and has no food delivery business, said on Wednesday that California makes about 16% of total trips.
Both companies said California was among the U.S. markets the most recovering from the pandemic.
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California accuses Uber and Lyft of violating a new state law that makes it harder to treat ‘gig’ workers as self-employed.
A state judge on August 10 warned Uber and Lyft of classifying drivers as contractors, an order that will go into effect after midnight on Friday morning.
Uber and Lyft have filed higher appeals, but it remains unclear if the higher court will give a decision before Thursday night’s deadline.
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