(Bloomberg) – California doubles its claim that Uber Technologies Inc. and Lyft Inc. make immediate, radical changes to their business models in their home state by converting their drivers from independent contractors to employees with benefits. California Attorney General Xavier Becerra asked a state an appeals court Wednesday to ignore the companies’ pleas to extend a break on the order of a lower court demanding the dramatic shift. A stay of the decision is set to expire at midnight Thursday. If the higher court agrees with Becerra or takes no action, Uber and Lyft have said the order forces them to stop ride-sharing operations in their home state Friday.
Read more: Uber seeks court refund to California closed-end threat San Francisco Superior Court Judge Ethan Schulman said in his August 10 order that Uber and Lyft “are not entitled to an indefinite extension of their day of reckoning.” The judge ruled that the companies Assembly Bill 5, or AB 5, damages, the year-old California law that obliges them to provide hundreds of thousands of drivers in the state with benefits, including health insurance and overtime that could cost billions of dollars.
“AB 5 calls out the malice of workers’ declaration on the name,” Becerra said in Wednesday’s save. Referring to years of litigation from executives who have fought against Uber and Lyft to win the benefits of workers, he said the ‘record is full of damage’ to the state and the companies were well aware of the fate they are now facing. Uber and Lyft argue Schulman’s review order is so sweeping that they legally guaranteed a break through the higher appeal. “The court must stop this severe crisis, and continue the promotion, while Uber pursues its appeal in this court,” the company said in a court submission. Both companies bankroll introduced a voting measure for a state vote in November that would give app-based transportation and delivery companies a reissue of AB 5. Proposition 22 exempts companies from paying for full benefits that employees currently receive under California law, such as unemployment insurance and full compensation of employees, while they are required to pay 120% of minimum wage, health care contributions and coverage for medical and disabled people, among others.The lawsuit in higher appeal is California v. Uber Technologies Inc. and Lyft Inc., A160706, California Court of Appeals (San Francisco).
(Updates with excerpt from the California submission in the fourth paragraph.)
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