Lyft will not stop running in California at midnight (updated)
Lyft and Uber have received a temporary reprieve from the courts and will keep operating.
Lyft will suspend its operations in California at 11:59PM Pacific Time. An injunction that requires the company to reclassify its drivers as employees is set to take effect on Friday. A court issued the ruling last week and the injunction was stayed for ten days while the companies tried to appeal it. Lyft and Uber both said they would temporarily shut down their services in the state if they had to comply with the order.
Back in May, California sued the companies over driver classification. It claimed Uber and Lyft were violating the state’s gig economy law (Assembly Bill 5), which came into effect on January 1st.
Lyft wrote in a blog post that “what Sacramento politicians are pushing is an employment model that 4 out of 5 drivers don’t support. This change would also necessitate an overhaul of the entire business model — it’s not a switch that can be flipped overnight.”
Uber CEO Dara Khosrowshahi echoed that sentiment earlier this week. He said his company wouldn’t be able to hire all 50,000 of its California drivers as employees “overnight.” Uber has yet to announce whether it will also suspend some operations in the state after today. Uber Eats will continue as normal for now. However, delivery drivers could be affected by the law too. In June, San Francisco District Attorney Chesa Boudin filed a lawsuit against DoorDash over worker classification.
Lyft is working on a “benefits model that works for all drivers and our riders. We’ve spent hundreds of hours meeting with policymakers and labor leaders to craft an alternative proposal for drivers that includes a minimum earnings guarantee, mileage reimbursement, a health care subsidy, and occupational accident insurance, without the negative consequences.”
Proposition 22, a ballot measure that Californians will vote on this November, seeks to exempt rideshare and delivery drivers from Assembly Bill 5. Uber and Lyft wouldn't have to reclassify them as employees should the measure pass. Those companies funded the measure along with DoorDash, Instacart and Postmates.
Update (3:12PM ET): Though Lyft’s site still states it plans to cease operations in California at midnight, a court has granted both Uber and Lyft a temporary reprieve to operate in the state.
Update (4:40 PM ET): A Lyft spokesperson has confirmed the company will not shut down operations in California tonight.
