An appeals court has allowed ride-hailing giants Uber and Lyft to continue treating their drivers as independent contractors while an appeal works its way through the court.
SAN FRANCISCO — An appeals court has allowed ride-hailing giants Uber and Lyft to continue treating their drivers as independent contractors while an appeal works its way through the court. Both companies had threatened to shut down if a ruling went into effect Friday morning that would have forced them to treat all their drivers as employees, a change they said would be impossible to accomplish overnight. Lyft told riders and drivers in a Thursday blog post that it planned to discontinue providing rides in California just before midnight tonight, unless a court grants a stay in a pending case. Uber CEO Dara Khosrowshahi had repeatedly said its service would have no choice but to stop providing rides in California if the state’s law goes into effect because the company can”t afford to hire 50,000 drivers as employees quickly enough to comply. The shutdown would have been a major blow to two companies that still haven’t proven they can make money, even as they have held down their expenses by treating drivers as independent contractors who don’t receive the same benefits as their full-time employees. California represents a substantial chunk of both companies’ businesses. It accounted for 9% of Uber’s worldwide rides before the pandemic caused people to avoid traveling. The state is even more important to Lyft, which doesn’t operate outside of the U.
