Lennart Wittstock via Unsplash

Things are starting to look a bit dicey for rideshare companies Uber and Lyft.

After almost a year’s notice, both companies were requested by California to reclassify their drivers as employees going forward on August 21st.

Uber CEO Dara Khosrowshahi made it pretty clear that they cannot “hire 50,000 people overnight”, but what’s interesting is that they’ve chosen to wait until now to work on a new model that would abide by a law that was updated last September.

This action follows a state lawsuit against the rideshare giants claiming they have avoided costs by classifying its drivers as contractors.

While the companies have bought some time until mid-October, Uber and Lyft are really banking on a Hail Mary in the form of Prop 22, where California residents will vote in November to determine its drivers’ status.

Teachable Moment:

It’s not often that you get a massive warning to work on problems that could disrupt your entire business, but when you do, take advantage of it. The general rule of thumb is to plan ahead when possible, especially if you know the iceberg is getting closer.