Uber and Lyft avoided an anticipated midnight shutdown of their ride hailing services, as an appeals court will allow them to continue treating their drivers as independent contractors while the case moves through the system.
Both companies were going to suspend California service at midnight tonight. Earlier, a judge ruled they had violated the state’s notorious Assembly Bill 5, which requires classifying workers as employees if they control how workers do their jobs.
Uber and Lyft claim they are not employers, but tech providers that connect drivers with riders. If drivers became employees, they would be covered by such protections as unemployment, sick leave and worker’s compensation insurance.
Given that both companies lose money, even the high stock valuations wouldn’t be enough to operate in the state, they claim. They, along with some other gig economy workers, are hoping to overturn Assembly Bill 5’s rules in the November election via Proposition 22, which aims to rescind the law.