Uber and Lyft have been battling with state regulators for more than a year over driver classification.
Angela Lang / CNET
Lyft and Uber will not suspend their ride-hilling services in California on Thursday at midnight after a state appeals court decision in their favor regarding an injunction against the companies. The move follows a court order in California – probably its largest market – which requires companies to classify drivers as employees.
Earlier in the day, Lyft said it was ready to close in the state.
“As a result of a court order, we will stop rideshare throughout California at 11:59 PM PT on Thursday, August 20,” the company said in an update on its website. “We did everything we could to prevent this and keep Lyft available to you, but it was not possible to test our business model and operations in ten days.”
Judge Ethan Schulman of the San Francisco Superior Court ruled on August 10 that the companies should ride with must classify their drivers as employees in the state. The judge said the order against the companies for 10 days would not be upheld to give them a chance to appeal – which both companies said they did.
The introduction comes from a lawsuit against Uber and Lyft filed by the state of California in May. The suit says the companies “exploited hundreds of thousands of workers in California” by classifying drivers as independent contractors and are in violation of California AB5 legislation on worker classification, which went into effect in January.
Uber and Lyft classify their drivers as self-employed, which means workers pay their own expenses, such as gas, car maintenance and insurance. Drivers also do not have labor benefits such as minimum wage, health insurance or paid sick leave. If they were classified as employees, many of those costs would then fall on the companies.
Hundreds of drivers in the state are rallying to be classified as employees by the companies. On Thursday several groups of riders plan a protest for Uber headquarters in downtown San Francisco that businesses require from AB5.
Both Lyft and Uber said last week that if California forced them to classify their drivers as employees, they would have to discontinued operations in the state. The decision then went to the Court of Appeal, which had the option to extend the 10-day break on the contract against the companies. Now that the court has allowed that expansion, Uber and Lyft will continue operations as usual in the state as the court investigates their appeal. An oral argument in the case is scheduled for October 13.
In a blog post on Thursday, Lyft also asked people in California to support a vote that the companies support with the name Proposition 22. In total, Uber and Lyft – along with Doordash, Postmates and Instacart – have $ 110 million behind the measure . The statement, which will be put to the vote in November, seeks to free the gig economy companies from AB 5.
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