Uber Technologies has said it would continue operating its revenue-generating food delivery company Uber Eats even if its ride-hail business should be pushed shut in California at the end of the week following a court order.
A company spokesman said Uber’s food delivery unit did not appear to be impacted by a lawsuit filed by California’s attorney general and a subsequent court order that would force Uber to treat its ride-hail drivers as employees.
Eats has been a boon to Uber during the pandemic as Americans stay home and many businesses and restaurants remain shut. Delivery orders in the second quarter more than doubled, while ride-hailing trip reservations, in the past responsible for nearly two-thirds of Uber’s revenue, were down 75 percent from this past year.
California represents 9% of Uber’s global rides and Eats gross bookings, but a minimal quantity of adjusted earnings before interest, taxes, depreciation and amortisation, Uber said in November. Lyft, which only operates in the US and Canada and doesn’t have a food delivery company, on Wednesday said California makes up some 16% of total rides.
Both firms said California was one of the US markets recovering the slowest from the pandemic.
California accuses Uber Technolgies and Lyft of violating a new state law making it more difficult to treat “gig” workers as independent contractors.
A state court judge on the 10th of August blocked Uber and Lyft from classifying drivers as contractors, an order which will take effect after midnight on Friday morning.
Uber and Lyft have filed appeals, but it remains unclear if the higher court will issue a decision prior to the Thursday evening deadline.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our content partners at Thomson Reuters. Reporting by Tina Bellon in New York. Editing by Sandra Maler and Richard Pullin.
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