Uber And Lyft Will Not Suspend Service In California Just Yet

It’s been a rollercoaster day for rideshare drivers and passengers in California after Lyft announced in a blog post that it would abruptly suspend service in the state on August 21st at 12:00 am PST and then reversed course by the afternoon. The decision comes in response to a court decision that requires both Uber and Lyft to reclassify their drivers as employees, a move that both rideshare companies have said would lead to a suspension of service in the state as they restructure and rehire their respective workforces.

According to CNBC, the lawsuit was filed by California’s Attorney General Xavier Becerra and alleged that both companies had dodged certain expenses for workers by falsely classifying them as contractors rather than employees, despite not meeting the requirements laid out in the state’s Assembly Bill 5.

A judge ordered that both companies would immediately have to classify their workers as employees, but an appeals court decision from this morning granted a brief extension and now both Uber and Lyft have until 5 pm PT on August 25th to file written statements agreeing to the procedures required by the order.

“While we won’t have to suspend operations tonight, we do need to continue fighting for independence plus benefits for drivers,” a Lyft spokesperson said in a statement following the appeal’s court order. “That’s the solution on the ballot in November, and it’s the solution drivers want because it preserves their ability to earn and use the platform as they do now.”

Both Uber and Lyft are supporting the passage of Califonia ballot initiative Proposition 22, which would exempt rideshare services from the requirements laid out in Assembly Bill 5, while still offering benefits to their drivers. Critics of the ballot initiative argue the Prop 22 hurts rideshare workers by not guaranteeing them the state’s minimum wage for hours worked, and enables Uber and Lyft to avoid paying into social security or offering health benefits.

While both Uber and Lyft will continue operating until at least August 25th, it’s unclear if service will remain uninterrupted in the state prior to Prop 22’s fate.