Uber and Lyft just avoided a shutdown. How they got here and what’s next

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The warnings are the result of California’s efforts to bring gig economy companies in compliance with state labor law — a clash that threatened to come to a head this week.

An emergency stay granted Thursday by a California appeals court temporarily defused the situation, allowing Uber and Lyft to continue operating under their current model for the time being. But unless a resolution is reached, millions of Californians who use Uber and Lyft to hail rides may yet find themselves forced to resort to other modes of transportation.

In early August, a San Francisco Superior Court judge ordered the companies to classify their drivers as employees rather than independent contractors, building in a 10-day window for the companies to appeal the move. With that window closing Thursday night, Uber and Lyft had threatened to shut down services at midnight Thursday, saying they cannot transition their business models quickly enough. Lyft reiterated that threat in a blog post Thursday morning, saying: “This is not something we wanted to do.”

“Uber and Lyft are threatening to kill jobs in California. I believe the companies are trying to force us into a decision around giving them what they want, and that’s Prop. 22, which is to keep denying us basic labor protections and benefits we have earned,” said Cherri Murphy, a ride-hailing company driver for about three years. An Oakland resident, Murphy is also an organizer with labor groups Gig Workers Rising and Rideshare Drivers United, which have fought to win protections for drivers.

Uber pushed back on this assessment, saying many drivers prefer to remain independent contractors. “The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law. When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression,” Uber spokesman Davis White said in a statement.

“Fortunately, California voters can make their voices heard by voting yes on Prop. 22 in November,” Zimmer said, and if passed, the measure “would protect driver independence and flexibility, while providing historic new benefits and protections.”

San Francisco’s district attorney sued food delivery app DoorDash in June, alleging worker misclassification. Uber said it anticipates a similar fight on this front.

Source: LA Times

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