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Uber and Lyft shutdown in California prevented an emergency stay by the judge.
California's state judge has blocked an order requiring Uber and Lyft to classify drivers as employees, preventing the expected shutdown of California's ride-sharing services at 11 o'clock, according to reporters from the Financial Times and the New York Times. The court granted a temporary stay to Uber and Lyft while the appeals proceeded.
Lyft had already announced plans for a temporary cessation of operations in the state earlier today, and Uber CEO Dara Khosrowshahi had said the same thing about his company yesterday in an interview.
Uber & Lyft are under enormous pressure to fundamentally change their business models in California, the state where both companies were founded and raised billions of dollars in venture capital. They claim that drivers enjoy the versatility of working as freelancers, while trade unions and elected officials complain that this deprives them of conventional benefits such as health insurance and workers ' compensation.
A new legislation, dubbed AB5, came into effect, making it more difficult for businesses to employ independent contractors. The legislation was specifically targeted at ride-sharing services such as Uber & Lyft, which based their businesses around the idea of independent contractors covering the cost of their jobs.
