Friday, 21 August 2020 15:18

Lyft, Uber Granted Temporary Stay Within Hour of Announcing Suspending Services in CA

Written by Bethany Blankley, The Center Square


Within an hour of Lyft's announcement Aug. 20 that the rideshare company was suspending services in the state of California because of a law requiring it to hire its drivers as full-time employees, a California appeals court judge granted Uber's and Lyft’s request for an emergency stay of the law.

Instead of being forced to reclassify their business or go out of business by Aug. 21, the companies have until at least mid-October, when the court will hear oral arguments in a case challenging the law.


“We are glad that the court of appeals recognized the important questions raised in this case, and that access to these critical services won’t be cut off while we continue to advocate for drivers’ ability to work with the freedom they want,” said Matt Kallman, a spokesman for Uber.


In the meantime, a major push for Proposition 22 is underway. California voters will approve or reject a measure that would change the new state law to define app-based transportation (ride share) and delivery drivers as independent contractors and adopt labor and wage policies specific to app-based drivers and companies.


At issue is AB5, a bill that Gov. Gavin Newsom signed into law last year and became effective Jan.1.


AB 5 was promoted as a way to prevent freelancers from being “exploited” by businesses that weren’t paying benefits such as health care, overtime, sick leave and expense reimbursements, or contributing to the state’s uninsured employment fund or Social Security.


But Lyft argues that the bill would force passengers to experience reduced services, and “80% of drivers would lose work and the rest would have scheduled shifts, and capped hourly earnings.”


“What Sacramento politicians are pushing is an employment model that four out of five drivers don’t support," Lyft says of the law. "This change would also necessitate an overhaul of the entire business model---it’s not a switch that can be flipped overnight.”

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