Uber and Lyft avoid state shutdown in driver fight
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.”