Uber, Lyft don’t shut down California operations after court ruling

Lyft and Uber will not suspend their ridesharing services in California at midnight Thursday, after a state appeals court ruled in their favor over an injunction against the companies. The moving follows a court order in California – probably its largest market – which requires companies to reclassify drivers as employees.

Earlier today, Lyft said it was ready to shut down in the state.

“Following a court order, we will be suspending carpooling across California at 11:59 p.m. PT on Thursday, August 20,” the company said in an update on its website. “We have done everything we can to prevent this from happening and keep Lyft available to you, but it has not been possible to revise our business model and operations in ten days.

San Francisco Superior Court Judge Ethan Schulman ruled on August 10 that transportation companies must start classifying their drivers as government employees. The judge said the injunction against the companies would not be enforced for 10 days to give them a chance to appeal – which both companies said they did.

The injunction stems from a lawsuit against Uber and Lyft filed by the state of California in May. The lawsuit says the companies “exploited hundreds of thousands of California workers” by classifying the drivers as independent contractors and are in violation of California’s AB5 worker classification law, which came into effect in January.

Uber and Lyft classify their drivers as independent contractors, which means workers pay for their own expenses, such as gasoline, car maintenance, and insurance. Drivers also do not have social benefits such as minimum wage, health insurance, or paid sick leave. If they were to be classified as employees, many of these costs would fall on businesses.

Hundreds of drivers around the state have come together to be classified as employed by the companies. Thursday, several groups of drivers staged a protest outside Uber headquarters in downtown San Francisco, requiring businesses to adhere to AB5.

Lyft and Uber said last week that if California forced them to classify their drivers as employees, they would. suspend operations in the state. The decision was then taken to the court of appeal, which had the option of extending the 10-day suspension of the injunction against the companies. Now that the court has granted the extension, Uber and Lyft will continue to operate as usual in the state as the court considers their appeals. A plea in the case is scheduled for October 13.

In a blog post Thursday, Lyft also urged people in California to support a voting measure that companies support called Proposition 22. In total, Uber and Lyft – along with Doordash, Postmates and Instacart – put $ 110 million behind. measurement. The proposal, which will be put to a vote in November, aims to exempt companies in the odd-job economy from AB 5.

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