Gig economy development. No California shutdown yet for Uber and Lyft, after court grants emergency injunction over worker status
Uber and Lyft will continue operating as normal in California after both ride-hailing firms were granted an emergency injunction by a court on Thursday.
Last week in what would likely be a significant development for workers in the gig economy, Judge Ethan Schulman of San Francisco Superior Court ruled that drivers for Uber and Lyft were employees, and not freelancers or contractors.
Almost immediately after that ruling, Uber CEO Dara Khosrowshahi warned that Uber’s service in California would be shut down temporarily.
This California shutdown threat was echoed by Lyft co-founder and President John Zimmer in an earnings call.
Both companies had applied for an emergency injunction against the ruling, and now the California First District Court of Appeal in San Francisco on Thursday avoided a shutdown of the ride-hailing services, after it granted their request.
This injunction means that drivers can continue working as independent contractors while the appeals court considers the question of driver status, Reuters reported.
The court has scheduled arguments in the case for 13 October, but is unlikely to issue a final ruling before a 3 November ballot – a measure that puts the decision in the hands of California voters, Reuters reported.
Some Uber and Lyft drivers are supporting the ballot measure and others are opposing it.
“If people want to be employed, they can look for a different job,” Ramon, a driver supporting the measure known as Proposition 22 who declined to give his full name, was quoted as saying.
But Uber and Lyft are facing determined opposition however by Californian officials.
Despite the reprieve, the office of California Attorney General Xavier Becerra reportedly said it remained confident in its case and would continue its fight to defend the rights of workers.
“California is America’s economic engine because innovation and worker rights go hand in hand. Any company that suggests otherwise is peddling a false choice,” Becerra reportedly said.
Uber and Lyft insist the vast majority of their drivers do not want to be employees, with some 80 percent reportedly working less than 20 hours per week.
The companies say their flexible on-demand business model is not compatible with traditional employment law and they are seeking what they call a “third way” between employment and contractor status.
Under the “third way” proposal outlined in the ballot measure, drivers would receive a health care stipend, a minimum wage, expense reimbursements as well as medical and disability coverage for injuries on the job.
It is now up to California voters to decide on the issue.
Demand for ride-hailing services has taken a hit during the Coronavirus pandemic, but that did not stop Uber earlier this month expanding its ride-hailing in the UK with the purchase of Autocab for an undisclosed amount.