Uber and Lyft get reprieve from court, won't shut down in California for now

Uber and Lyft narrowly avoided shutting down their ride-hailing services in California after an appellate court granted the companies a temporary reprieve delaying an order that would have forced them to reclassify their drivers in the state by Friday. CNN's Brian Fung reports.

Posted: Aug 21, 2020 10:21 AM
Updated: Aug 21, 2020 10:21 AM

Uber and Lyft narrowly avoided shutting down their ride-hailing services in California after an appellate court granted the companies a temporary reprieve delaying an order that would have forced them to reclassify their drivers in the state by Friday.

While the legal decision on Thursday buys the companies more time, they still do have a deadline hanging over their heads to reclassify their drivers as employees rather than independent contractors.

"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," said Uber spokesperson Noah Edwardsen in a statement.

With hours to go before the original deadline, the companies were bracing for a shutdown. Lyft said earlier Thursday it would suspend service in the state by end of day if an appeals court didn't grant its request for a delay. Uber said earlier this week it would also suspend service by midnight Thursday if not granted a similar delay on the order.

"While we won't have to suspend operations tonight, we do need to continue fighting for independence plus benefits for drivers," said Lyft spokesperson Julie Wood in a statement.

As part of an ongoing lawsuit, a California court last Monday ordered the companies to reclassify their drivers in the state as employees rather than independent contractors in 10 days, or by this Friday.

In response to that court order, both companies warned that they might suspend operations in California. Each coupled those warnings with a push for a referendum in November to exempt them from the law, known as AB-5, if they could not successfully appeal for a longer stay on the order.

Under AB-5, which went into effect January 1, companies must prove workers are free from company control and perform work outside the usual course of the company's business in order to classify workers as independent contractors rather than employees.

Thursday's order lays out new deadlines for the companies. By September 4, 2020, the CEOs of Uber and Lyft must submit sworn statements with "implementation plans" for complying with the law within 30 days if the court upholds the earlier injunction order and if the ballot initiative does not pass. Oral arguments are scheduled for October 13, 2020.

A reclassification of their workers would represent a radical shift forced on the two businesses. Uber and Lyft have both built up massive fleets of drivers by treating them as independent contractors. Making the drivers contractors rather than employees has meant they are not entitled to benefits like minimum wage, overtime pay, workers' compensation, unemployment insurance and paid sick leave.

When faced with tough legislation over the years, the companies have threatened to suspend their services, and sometimes followed through on it, riling up customers and drivers, and putting pressure on lawmakers. This time around, industry watchers had warned that the shutdown may not have the same impact on residents as it once did in earlier fights because of their steep drop in ridership from the pandemic.

The New York Times reported earlier this week that while pushing their November ballot initiative, the companies are also considering their other options, including exploring a franchise-like model where they would not employ drivers directly but would instead potentially license their name to fleet operators in the state.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 735999

Reported Deaths: 13486
CountyCasesDeaths
Marion1007151752
Lake54249977
Allen40946680
St. Joseph36335553
Hamilton35829408
Elkhart28844443
Tippecanoe22475219
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Johnson18067381
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Warrick7799155
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Grant7098174
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Boone6745101
Morgan6611140
Dubois6166117
Marshall6111112
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Jay197830
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Switzerland7948
Union71410
Ohio57111
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Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1091623

Reported Deaths: 19528
CountyCasesDeaths
Franklin1268061406
Cuyahoga1132982134
Hamilton804211211
Montgomery518231015
Summit47606955
Lucas42618792
Butler38548585
Stark32661909
Lorain25199486
Warren24390300
Mahoning21795588
Lake20846371
Clermont19880240
Delaware18608133
Licking16488212
Fairfield16327200
Trumbull16196468
Medina15379266
Greene15143244
Clark14096299
Wood13168189
Portage12966206
Allen11740232
Richland11433199
Miami10713220
Wayne8923214
Columbiana8881229
Muskingum8831133
Pickaway8596121
Marion8561136
Tuscarawas8509245
Erie7958155
Hancock6944128
Ashtabula6904172
Ross6876156
Geauga6741148
Scioto6444102
Belmont5978168
Union575448
Lawrence5590102
Jefferson5583151
Huron5462120
Sandusky5380122
Darke5374126
Seneca5311122
Washington5228109
Athens520858
Auglaize494986
Mercer481585
Shelby470293
Knox4513110
Madison439363
Putnam4301101
Ashland426590
Fulton426469
Defiance424697
Crawford3993107
Brown397557
Logan383276
Preble381398
Clinton374163
Ottawa369081
Highland356862
Williams343475
Champaign335358
Guernsey317653
Jackson314152
Perry295950
Morrow287239
Fayette283550
Hardin271964
Henry270366
Coshocton266157
Holmes2625101
Van Wert244263
Adams240053
Pike238634
Gallia236749
Wyandot232155
Hocking216462
Carroll192448
Paulding174340
Meigs145540
Noble134137
Monroe132542
Harrison109637
Morgan108823
Vinton84915
Unassigned02
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