California passed Assembly Bill 5 late last year in a bid to reclassify many gig economy workers as employees, and so far, Lyft and Uber have not done that. The state is suing them, and on Monday afternoon Judge Ethan Schulman of San Francisco Superior Court ruled in favor of granting a preliminary injunction that would block the companies from classifying drivers as independent contractors.
Reuters reports that in the 34-page decision Schulman said there’s an “overwhelming likelihood” that the state will prove the two companies have illegally misclassified workers, and that they fail the law’s three-step test to determine if workers are employees. He delayed enforcement of the ruling for ten days to allow for appeals, which both companies plan to pursue, while the San Francisco Chronicle reports Uber also said it will push for a longer stay. In a statement, Lyft said “We’ll immediately appeal this ruling and continue to fight for their independence. Ultimately, we believe this issue will be decided by California voters and that they will side with drivers.”
Earlier in the day Uber CEO Dara Khosrowshahi published an op-ed calling for a gig worker’s benefits fund, but insists drivers want to work independently. Uber and Lyft are also suing over the law, and are part of a coalition pushing to get Proposition 22 on the ballot in California this November, which would keep drivers as freelancers.