Uber And Lyft Got A Reprieve To Retrain Drivers As Employees
The California court of appeals suspended a lower court decision that ordered taxi services Uber Technologies and Lyft to transfer drivers from contractor status to employees by August 21, the Wall Street Journal reported.
This decision means that both companies will be able to continue operating in the state until their appeals are completed, the publication explains.
The services previously warned that they would be forced to stop working in California if they had to comply with the San Francisco Supreme court ruling. On Thursday morning, Lyft warned via its website that it would suspend service by midnight. Now the company has confirmed to the WSJ that it has no plans to stop working in the state.
"We are pleased that the appeals court has recognized the importance of the issues raised in this case and that access to these very important services will not be closed while we continue to advocate for drivers to work with the freedom they want," an Uber representative told Bloomberg.
The court decisions are related to a lawsuit filed against the companies by a group of California prosecutors. They accused Uber and Lyft of violating the state's law on independent contractors. According to this law, companies belonging to the so-called free earnings economy (gig economy) must comply with certain conditions. Independent contractors, in particular, cannot perform work that is part of the company's core business.
Uber and Lyft object that they are not transporting companies, but developers of platforms for ordering taxis.
"We are confident in the facts of our case and look forward to continuing to fight to protect workers' rights," California Attorney General Javier Bessera said in a statement.
Uber shares rose 6.8% at the end of trading on Thursday. The price of Lyft securities increased by 5.8%.