Uber and Lyft have been fighting for their lives over a ruling made by a Californian court, forcing the companies to reclassify their drivers as employees rather than independent contractors. The move was made to ensure that drivers from these platforms can avail employee benefits like health insurance, paid leaves etc., but has met with stark rebuttal from the companies. Now, the court has decided to provide a temporary stay on the conversion process to consider arguments from the other side of the aisle.
California Superior Court Judge Ethan Schulman made a decision earlier this month, forcing Uber and Lyft to reclassify their drivers as employees. The two companies had gone to amass great workforces without all the downsides that come with such a provision, and the judge wanted to address that. However, spokespersons from the companies went on to publicly criticize the decision almost immediately, with Uber CEO Dara Khosrowshahi being the first one to claim that the company might have to stop its operations in California if the judge does not reconsider his decision.
Lyft followed suite soon, and said that it will also not be able to reclassify its drivers in such a short amount of time(there was just a 10 days ultimatum), thus premonising a shutdown in the state. Moreover, just last night, the company said that it will be shutting down shop in California.
Before it could do so, the court has now thankfully ordered a stay on the reclassification case, adding that it will hear now, Uber and Lyft’s appeal to overturn the trial court’s ruling. Now, oral arguments in the case are set for mid October, with companies having only until September to outline their plans about how they will make drivers employees if they lose the appeal and/or Prop 22 doesn’t pass in California.
“We are glad that the Court of Appeals recognized the important questions raised in this case, and that access to these critical services won’t be cut off while we continue to advocate for drivers’ ability to work with the freedom they want,” an Uber spokesperson said.
Similarly, a Lyft spokesperson said, “While we won’t have to suspend operations tonight, we do need to continue fighting for independence plus benefits for drivers.”
Going by the arguments they have made in the past, and the entire model of their business, Uber and Lyft are likely to argue that their drivers don’t want to become employees in the first place, and would rather retain their identities as independent contractors. Lyft says that this preserves the drivers’ ability to earn and to use the platform as they do now — whenever they want — while also getting historic new benefits
