Whatever the outcome of its ongoing legal spat with the state of California, Uber CEO Dara Khosrowshahi doesn’t believe his company can employ all the people who drive for the platform in California, at least not without a fundamental rethinking of its business.
“We can’t go out and hire 50,000 people overnight,” Uber CEO said in an interview with the Pivot School podcast (via The Verge). “Everything that we have built is based on this platform… brings people who want transportation or delivery together. You can’t flip that overnight.”
The comment is the latest development in the ongoing drama between the ridesharing company and California. On August 10th, the state won a preliminary injunction against Uber and Lyft.
A judge ordered the two companies to comply with California’s Assembly Bill 5 labor law. The legislation attempts to reclassify some contract workers as employees. If the court upholds the injunction, both Uber and Lyft said they would need to suspend operations temporarily.
In an interview with MSNBC, Khosrowshahi said the company would shut down until November. That’s when the state votes on Proposition 22. If passed, the measure would allow Uber to continue employing drivers as contractors but would require the company to offer them benefits such as health insurance.
“It’ll take time but we’re going to figure out a way to be in California,” Khosrowshahi told the Pivot School podcast.
As he’s down in past interviews, Khosrowshahi went on to warn that Uber’s forced compliance with AB5 will hurt consumers. He said the cost of Uber rides in cities like San Francisco could increase by approximately 20 percent, with the price of service growing even more in more sparsely populated communities.
He also warned that close to 80 percent of drivers who work about five to 10 hours a week would likely no longer be able to earn money through the app.