Roommates, following recent reports that it would immediately shut down in California if the court didn’t rule in its favor, Lyft (along with competitor Uber) received an emergency stay from the court. The last minute ruling came just hours before Lyft said they would terminate all services in California until at least November due to their fight to keep company drivers as independent contractors.
An appeals court has allowed ride-sharing leaders Lyft and Uber to continue treating their drivers as independent contractors in California in a decision that will give the two companies a few more months to protect their business models in a key market.
The stay pauses a lower-court ruling that was scheduled to take effect at midnight on August 21st and would have forced Lyft and Uber to officially classify all drivers as employees. The companies previously said that such a major change in its business model would be impossible to accomplish overnight and would have saddled them with a financial burden difficult for them to shoulder while they are still struggling to turn a profit.
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Lyft told riders and drivers in a recent blog post that it planned to discontinue providing rides in California just before midnight if a stay from the court was not given.
Similarly, 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 just flip a switch and quickly hire about 50,000 drivers as employees.
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