Last-minute California ruling means Uber and Lyft won’t shut down today
Lyft had announced plans to cease California operations at midnight. …
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A California judge has granted Uber and Lyft an emergency reprieve from an order requiring them to treat their drivers as employees. The companies were facing a Thursday deadline to comply with the order. Earlier today, Lyft announced that it would be forced to shut down in the state at midnight tonight.
Lyft said it was being forced to shut down its California operations by a 2019 California law, AB 5, that forces ride-hailing companies to treat their drivers as employees rather than independent contractors. Uber had warned that it was likely to do the same if the courts didn’t delay enforcement of the law.
“This is not something we wanted to do, as we know millions of Californians depend on Lyft for daily, essential trips,” Lyft wrote. However, the company said, the new law would “necessitate an overhaul of the entire business model—it’s not a switch that can be flipped overnight.”
The judge’s emergency stay means that Lyft and Uber will be able to keep operating under their current model while they continue litigating whether the new law applies to them.
Uber says employee status will be bad for drivers
Lyft and Uber have traditionally treated their drivers as independent contractors, which means their drivers haven’t enjoyed benefits like a minimum wage, compensation for expenses, unemployment insurance, and overtime pay.
The current model is good for Uber and Lyft, and the companies argue that many drivers also benefit from the freedom it provides. Uber and
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