Uber and Lyft consider changing business model to avoid California labour laws

Uber and Lyft are discussing switching to a franchise-like business model in California. Both companies have suffered increasing pressure from legislators and courts to reclassify their drivers as employees. The new business plan could add further distance between the companies and the drivers. The hide-railing companies are considering franchising their technology to smaller businesses operating vehicle fleets in order to make those businesses responsible for the drivers. The model is already familiar to Uber, because it already works with fleet operators in Spain and Germany. Both Uber and Lyft had warned that they may pull their operations out of California entirely, since the legislation AB5 entered into force in January 2020.