# Why Uber & Lyft Threatened to Leave California For Good: Business Casual

Published 2020-08-26 · Updated 2026-07-23 · Engineering & Construction on MarketScale
Canonical: https://www.marketscale.com/industries/engineering-and-construction/why-uber-lyft-threatened-to-leave-california-for-good

> Uber & Lyft are experiencing serious deja-vu as California cracks down on their business model, similar to when an Austin, TX ballot proposition pushed the ride share companies out in 2016. California, in a well-intentioned effort to get gig-workers better benefits, demanded the Big Tech companies make their freelancers employees, not contractors. In retaliation…

Uber & Lyft are experiencing serious deja-vu as California cracks down on their business model, similar to when an [Austin, TX ballot proposition pushed the ride share companies out in 2016](https://www.wired.com/story/uber-lyft-flee-california-austin/). California, in a well-intentioned effort to get gig-workers better benefits, demanded the Big Tech companies make their freelancers employees, not contractors. In retaliation to the most [recent expedited request](https://marketscale.com/industries/transportation/uber-lyft-get-an-ab-5-update/) from San Francisco Superior Court Judge Ethan Schulman, Uber & Lyft said the companies would cease operation completely, leaving thousands of freelancers in the lurch without work. [According to Market Watch, several California mayors spoke up](https://www.marketwatch.com/story/california-makes-bold-moves-to-tackle-big-tech-with-uber-and-lyft-showdown-2020-08-20) in concern, and the courts delayed enforcement until September 4.

Now the ride share companies are faced with a ticking time bomb, and freelance drivers are waiting with bated breath. The companies can either restructure their business to satiate benefit concerns, or pull out of operating in California all together, making way for new last-mile transportation startups. On this [Business Casual](https://marketscale.com/industries/podcast-network/business-casual/) snippet, hosts Daniel Litwin & Tyler Kern unpack the varying justifications given by Uber & Lyft for their potential departure, and how ultimately, voters may be the final decision makers on the issue with November’s Prop-22.

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