A California judge has granted Uber and Lyft an emergency reprieve from an order requiring them to treat their drivers as employees. The companies were facing a Thursday deadline to comply with the order. Earlier today, Lyft announced that it would be forced to shut down in the state at midnight tonight.
Lyft said it was being forced to shut down its California operations by a 2019 California law, AB 5, that forces ride-hailing companies to treat their drivers as employees rather than independent contractors. Uber had warned that it was likely to do the same if the courts didn't delay enforcement of the law.
"This is not something we wanted to do, as we know millions of Californians depend on Lyft for daily, essential trips," Lyft wrote. However, the company said, the new law would "necessitate an overhaul of the entire business model — its not a switch that can be flipped overnight."
The judge's emergency stay means that Lyft and Uber will be able to keep operating under their current model while they continue litigating whether the new law applies to them.
Uber says employee status will be bad for drivers
Lyft and Uber have traditionally treated their drivers as independent contractors, which means they haven't enjoyed benefits like a minimum wage, compensation for expenses, unemployment insurance, and overtime pay.
The current model is good for Uber and Lyft, and the companies argue that many drivers also benefit from the freedom it provides. Uber and Lyft drivers can log in to the app whenever and wherever they want, work for as long as they want, and then log off. They can also work for multiple companies simultaneously.
This has obvious benefits over most conventional jobs, where workers are usually expected to commit in advance to working a particular schedule. Many Uber and Lyft drivers cite this flexibility as a major reason they choose this line of work.
Critics point out that nothing in employment law requires employers to set fixed schedules for their employees. That's technically true, but Uber has argued that making drivers employees will erode the autonomy drivers enjoy today.
"There is no major company in the state of California or, indeed, in the entire country, where hourly employees can work like drivers currently do with Uber," wrote Uber economist Alison Stein in a recent blog post. "Starbucks offers one of the most flexible part-time jobs around, but baristas cant just walk in unannounced, decide they will only make lattes whiRead More – Source