Steve August 20, 2020

A California appeals court judge has granted a down-to-the-wire emergency stay on an injunction ordering Uber and Lyft to reclassify their ride-hailing app drivers as employees.

That injunction was sought by Cali prosecutors to enforce AB5, a recent law that forces gig-economy companies to treat certain workers as employees, with all the benefits that entails, rather than as independent contractors.

It was due to go into effect this Friday, and both tech upstarts had threatened to halt their taxi services in the US state from that date rather than hire tens of thousands of drivers as staff – as doing so would wreck their business model. Now with the legal block in place, it’s business as usual, and journeys will continue, we’re told.

The 1st Appellate Court just now ruled that its pause on the injunction will remain in place as it hears Lyft and Uber’s ongoing appeal against the injunction, if the gig-economy outfits agree to the following process by 5pm PT, August 25:

  • Lyft and Uber have to, more or less, work together and combine their paperwork.
  • Their arguments against the injunction must be submitted by September 4, and hearings will be held on October 13, pushing the case to at least mid-October.
  • Each biz’s CEO has to submit a sworn statement on how they will obey the law if their appeal fails, the injunction finally goes into effect, and Californian voters refuse to back Proposition 22 in November, which would exempt Uber, Lyft and similar companies from AB5. That ballot measure is said to give drivers at least some benefits as a compromise.

Uber this month threatened to halt its service in California as a result of the row over drivers’ employment rights, and earlier today Lyft said it was definitely going to shut down operations in the Golden State from midnight.

In a message to customers in the past hour, following the court decision, Lyft said it will continue its service in Cali:

“While we won’t have to suspend operations tonight, we do need to continue fighting for independence plus benefits for drivers,” spokesperson Julie Wood told us. “That’s the solution on the ballot in November, and it’s the solution drivers want because it preserves their ability to earn and to use the platform as they do now — whenever they want — while also getting historic new benefits. Without it, 80-90 per cent of Californians who earn on app-based platforms will lose that opportunity.”

Meanwhile, a spokesperson for Uber said in a statement: “We are glad that the Court of Appeals recognized the important questions raised in this case, and that access to these critical services won’t be cut off while we continue to advocate for drivers’ ability to work with the freedom they want.”

Uber and Lyft’s stock are up about six per cent each right now. ®

Read More