Uber and Lyft won’t suspend California operations after court gives them time to fight law
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 and owed 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 they didn’t have enough time to completely overhaul their business model and adjust drivers’ employment status. The court scheduled oral arguments for the appeals on Oct. 13.
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 a post. “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.”
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, who wrote AB 5. “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.”
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 ballot measure fail, the companies will have to prove they are developing plans to comply with AB 5.
The group sponsoring the ballot measure said the court’s decision, while welcomed, only temporarily delayed the “threat” to app-based jobs.
“That’s why we need voters to pass Prop 22 to save app-based jobs and services so we can protect our choice to work the way we want,” Sacramento-based driver Chanel Lampkin said in a statement. “Prop 22 is the solution we need to preserve drivers’ independence while providing guaranteed wages, and benefits like health care which I need to care for my family.”
A spokesman for the labor-backed coalition opposing the ballot measure said the initiative is a way for the companies to avoid their legal obligation to provide a fair wage and benefits like workers’ compensation and sick leave for their drivers.
“When they get caught breaking law, the app companies throw a tantrum - using extortion tactics to intimidate elected officials, drivers, and consumers into giving them what they want: a blank check to rewrite laws that work for their bottom line and leave drivers out in the cold,” said Mike Roth, spokesman for the No on Prop 22 campaign.
This story was originally published August 20, 2020 at 12:40 PM with the headline "Uber and Lyft won’t suspend California operations after court gives them time to fight law."