By Gina Yarbrough/San Diego County News
A California First District Court of Appeal will allow ride-share companies Uber and Lyft to continue operations while both companies continue their court battle over Assembly Bill 5, a state law that requires the app-based companies to classify their workers as employees instead of independent contractors.
Lyft had threatened to suspend operations in the state at 11:59 p.m. Thursday over Assembly Bill 5. The company said in a blog post that changing their business model in ten days was not feasible.
“We did everything we could to prevent this from happening and keep Lyft available for you, but it wasn’t possible to overhaul our business model and operations in ten days. An overwhelming majority of drivers don’t want us to make these changes either, because they would fundamentally alter how rideshare works, who is able to drive, and when.”
On August 10, San Francisco-based Superior Court Judge Schulman ruled in favor of Assembly Bill 5, and mandated that Uber and Lyft classify their drivers as employees, not independent contractors.
On June 24, California Attorney General Xavier Becerra, and the city attorneys of Los Angeles, San Diego, and San Francisco filed a preliminary injunction motion to require Uber and Lyft to halt the misclassification of their drivers as independent contractors. The motion followed the lawsuit filed by the attorney general and city attorneys alleging that Uber’s and Lyft’s misclassification of drivers deprives workers of critical workplace protections such as the right to minimum wage and overtime, and access to paid sick leave, disability insurance, and unemployment insurance.
“It’s time for Uber and Lyft to own up to their responsibilities and the people who make them successful: their workers,” said Attorney General Becerra. “Misclassifying your workers as ‘consultants’ or ‘independent contractors’ simply means you want your workers or taxpayers to foot the bill for obligations you have as an employer — whether it’s paying a legal wage or overtime, providing sick leave, or providing unemployment insurance. That’s not the way to do business in California. We’re seeking a court order to force Uber and Lyft to play by the rules.”
Uber and Lyft, along with app-based food delivery company DoorDash, are backing the Protect App-Based Drivers and Services Act, (Prop. 22) to keep drivers classified as independent contractors, and not employees or agents.
Assembly Bill 5, authored by CA Assemblywoman Lorena Gonzalez, went into effect January 1, 2020. Gonzalez responded in a tweet about the appeals court’s temporary reprieve.
“Uber & Lyft can quit crying now & work on reclassifying their drivers as employees. They have been on notice for 2 years, but now they have another month to figure it out without hurting their workers. Shame on them with their scare tactics!”
Prop. 22 will be placed on the state’s November ballot for voters to decide.