Lyft to suspend operations in California at midnight

Lyft is suspending operations in California over a law that requires the ride-hailing service to classify its drivers as employees. Service in the state is set to end just before midnight Pacific time on Thursday, the company said on its blog.

Last week, a state judge ordered Lyft and its larger rival, Uber, to treat drivers as employees rather than independent contractors, as required under a law passed in California last year. The transportation companies had claimed that the law did not apply to them.

“This is not something we wanted to do,” Lyft said in the announcement, claiming that most drivers did not want to be employees and that following the law would lead to 80% of drivers losing work.

“This change would also necessitate an overhaul of the entire business model — it’s not a switch that can be flipped overnight,” the company said of the law, which took effect January 1.

This is a developing story.