Uber and Lyft pulled back from their warning that they would suspend their services in California by Friday morning after an appeals court gave the companies a legal reprieve allowing them more time to figure out how to comply with a new state labor law.
Hours before the companies planned to go offline, California’s 1st District of Court of Appeal issued a stay on an order that would have forced the them to comply immediately with a labor law that requires businesses to give employment benefits to more workers rather than classify them as independent contractors.
“We are glad that the Court of Appeals recognized the important questions raised in this case,” Uber spokesman Davis White said, “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.”
California sued Uber and Lyft earlier this year, alleging they were skirting the law andowed millions of dollars in back wages. Last week, a San Francisco Superior Court judge handed Uber and Lyft an Aug. 20 deadline to fall in line with the labor law known as Assembly Bill 5.
The companies appealed the ruling, arguing that they didn’t have enough time to overhaul their business model and adjust drivers’ employment status.
Until the 1st District Court of Appeal granted a stay on the order, Uber and Lyft had said they would have had no choice but to temporarily suspend their services.
“This is not something we wanted to do, as we know millions of Californians depend on Lyft for daily, essential trips,” Lyft said Thursday in apost. “We don’t want to suspend operations. We are going to keep up the fight for a benefits model that works for all drivers and our riders.”
The court scheduled oral arguments for the appeals on Oct. 13.
The companies are also trying to exempt themselves from the new labor law with a ballot initiative called Proposition 22 that would allow them to continue classifying drivers as independent contractors but require them to provide some additional benefits.
If the appeal and the Proposition 22 campaign fail, the companies will have to prove they are developing plans to comply with AB 5.
AB 5’s author, Assemblywoman Lorena Gonzalez, D-San Diego, had called the companies’ decision to leave California a “mean-spirited tactic to bully Californians into giving the companies a special exemption” from the law.
“No one is forcing Uber and Lyft to throw hundreds of thousands of workers out in the cold,” said Gonzalez. “App companies have had years to fix this, but refuse. Shame on these corporations who are sitting on billions of dollars in cash reserves but are leaving their drivers with nothing.”
