Uber Technologies Inc UBER made it clear to the public Wednesday that it wouldn't hesitate to shut down its operations in California if the state proceeds with a new law mandating that the ride-hailing company treat drivers as employees.
What Happened: Uber has 10 days to appeal a California court decision requiring the company to classify its drivers as employees.
If such a decision isn't overturned, Uber may be left with no choice but to temporarily shut down its app in California, company CEO Dara Khosrowshahi told MSNBC in an interview.
It is "hard to believe" Uber even has the capability to reclassify thousands of people as employees, adding that Uber might "shut down for a while" in the state.
The company will comply with all laws and remains committed to serving Californians over the long-term, the CEO said.
Uber's vision over the last 10 years makes it impossible to adjust overnight to a new law, he said.
Why It's Important: The vast majority of drivers on Uber's platform want the flexibility that comes with being an independent contractor, as they can work as little or as much as they want, Khosrowshahi said.
Uber presented an alternative "third way" option that would allow drivers to access a special fund that would be tapped for paid time off or health care benefits, the CEO said, describing it as a "best of both worlds" option.
What's Next: California Attorney General Xavier Becerra isn't a fan of either option. He told CNBC in a Tuesday interview that Uber is free to leave the state unless it goes with the employee classification model.
"Any business model that relies on shortchanging workers in order to make it probably shouldn't be anywhere, whether California or otherwise," he said.
UBER Price Action: Uber shares were trading down 1.06% at $30.87 at the time of publication Wednesday.
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Photo courtesy of Uber.
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