Uber and Lyft avoid state shut­down in driver fight

The Daily Telegraph - Business - - Front Page - By Margi Mur­phy

TAXI apps Lyft and Uber nar­rowly avoided shut­ting down in one of their big­gest mar­kets last night af­ter a court awarded them an emer­gency stay, amid a le­gal bat­tle forc­ing them to clas­sify driv­ers as em­ploy­ees.

Lyft told cus­tomers it would halt all rides in Cal­i­for­nia yes­ter­day, af­ter be­ing or­dered by a San Fran­cisco judge to fol­low a new labour law that re­clas­si­fies tens of thou­sands of driv­ers as staff.

Uber was ex­pected to an­nounce a sim­i­lar sus­pen­sion but a judge blocked the court or­der at the last minute, al­low­ing them to con­tinue run­ning through­out the ap­peals process.

The state is a vi­tal mar­ket for the two firms and pro­vides work for as many as 514,000 of their driv­ers. Sim­i­lar dis­putes about the sta­tus of work­ers in the so­called gig econ­omy are rag­ing glob­ally. Uber’s warn­ing sug­gests it could also shut else­where, in­clud­ing Lon­don, if it loses the de­bate.

Lyft and Uber are be­ing sued by Cal­i­for­nia for fail­ing to fol­low the new labour law, Assem­bly Bill 5 (AB5), which gives driv­ers the right to sick pay, over­time and un­em­ploy­ment in­sur­ance. Both com­pa­nies ar­gue that they do not meet the con­di­tion that driv­ers are “core” to the busi­ness.

Last week a San Fran­cisco judge granted an in­junc­tion com­pelling them to im­me­di­ately fall into line. Lyft said: “This change would also ne­ces­si­tate an over­haul of the en­tire busi­ness model – it’s not a switch that can be flipped overnight.”

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.