San Francisco (AFP)

Lyft, Uber's US rival, on Thursday announced it was suspending its popular chauffeur-driven shopping service from 11:59 p.m. in California, after a court ruling to re-qualify drivers as employees in the southwestern state, most populous and richest in the United States.

The announcement suddenly raises the stakes in the battle between the two leaders in the reservation of cars with driver (VTC) and the state authorities: the immediate fate of tens of thousands of drivers hangs in the balance, as well as the he future of the gig economy, the model that has changed many sectors in ten years.

The California court, under a law in effect since January, had allowed Lyft and Uber ten days, or until Friday, to get into good standing.

Both platforms appealed, but Lyft took action without waiting for a possible extension of the deadline. A similar announcement from Uber is expected during the day, unless there is a legal twist.

"This is not something we wanted to do, because we know that millions of Californians depend on Lyft for daily and essential travel," the company said in a statement posted on its blog.

She argues that she has no choice, because a change in status "would require a complete overhaul of the business model - it's not a switch you flip over overnight."

- United competitors -

The two San Francisco-based companies see themselves as technology platforms, connecting drivers and passengers, not transportation companies.

The AB5 law, which came into effect in California on January 1, was drafted with Uber and Lyft in their sights.

Politicians thus intend to force them to grant social benefits (health and unemployment insurance, overtime, etc.) to their tens of thousands of Californian drivers, considered to be self-employed, who often work in precarious conditions.

The platforms ensure for their part that the overwhelming majority of drivers ("4 out of 5") prefer the current model, for the flexibility of schedules.

According to Lyft, 86% of its California drivers drive less than 20 hours a week and want to be in control of their schedule, because they are students, retirees, or have another job.

If the drivers become employees, "passengers will have reduced service, especially in the suburbs and rural areas", and the prices of the races will increase, argues the app with the bright pink logo.

"80% of the drivers will lose work and the others will have shifts with schedules, and incomes per hour capped".

The two competitors are betting on a referendum, scheduled for November, to save their model.

They spent tens of millions of dollars to organize the poll and call on citizens of the state to support their "Proposition 22", a compromise that would guarantee flexibility and certain social benefits to self-employed drivers.

- Poker game -

"Interrupting service in California could allow them to gain support for Proposition 22, because consumers are likely to be frustrated if there is suddenly no VTC in the state," notes analyst Dan Ives of Wedbush Securities.

"In this game of high level poker, we think it's smart on Lyft's part, and Uber who will follow suit."

Elected officials and unions in favor of the AB5 law recalled for their part that Lyft and Uber had time to regularize their situation since January.

"It's a shame that companies prefer to shut down operations instead of complying with labor laws," Jim Hoffa, president of the American union Teamsters, said on Wednesday, calling their "threats" "tactics of intimidation of greedy corporations. ".

The Californian twists and turns are being followed closely in the United States and by the many other governments critical of the "gig economy".

Uber has so far never managed to turn a profit. In the first half of 2020, the group lost $ 4.7 billion, mainly due to the collapse in demand for car trips during the health crisis.

A change in the model is “inevitable” for independent analyst Rob Enderle, but “now is not the time. (Due to the pandemic) a lot of drivers are in survival mode, and Uber and Lyft are losing a lot of money. 'money. They could go bankrupt.

© 2020 AFP