UPDATE: CNBC reports that on Thursday afternoon a California appeals court granted a temporary reprieve that allows Uber and Lyft until 5pm on August 25 to file written statements that agree to the procedures required by the original court order. So Uber and Lyft won’t be shutting down in California today—but we’ll see what happens next week.
Our original story appears below.
A California appeals court extended the length of time Uber and Lyft will have to comply with an order requiring them to reclassify rideshare drivers as employees.
The temporary reprieve gives Uber and Lyft until 5 p.m. PT on August 25 to file written statements agreeing to expedited procedures stated in the order.
Our original story appears below.
As if this summer hasn’t been nearly exciting enough already, here’s a little bit of extra drama to throw on top of the anxiety-inducing pile: Lyft has announced that it’ll be suspending its ride-hailing services in California.
Earlier this month, a California judge ruled that Uber and Lyft have misclassified their drivers as independent contractors when, according to the terms of state labor law AB 5, they should be considered employees. The ruling essentially amounted to accusations of wage theft as the court insisted that Uber and Lyft’s drivers were entitled to all of the rights and protections guaranteed to employees under California law. If the companies didn’t reclassify their drivers as employees by August 20, then they would be forced to suspend their services.
And that’s exactly what’s happened today. In an announcement on its website today, Lyft said that it will be suspending ride-hailing service throughout all of California starting August 20 at 11:59pm. “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 10 days,” the statement reads. It’s worth noting that the suspension doesn’t impact their car and scooter rental services in Los Angeles, among other cities.
As of publication, Uber has yet to announce a shutdown, but given their recent statements—including an op-ed in the New York Times about why their drivers shouldn’t be considered employees—such a scenario seems likely.
It seems likely that the issue will ultimately be up to voters in November: Both companies have put their support behind Proposition 22, an initiative to keep Uber and Lyft drivers labeled as independent contractors while also adopting labor and wage policies.