Lyft Reverses Decision to Stop Operating in California

Many Lyft drivers in California were saddened to learn on Thursday that the company said in a blog post that it would be suspending services in the state as of midnight PT.

Later in the day Lyft however reversed the decision after a California appeals court extended the length of time Uber and Lyft have until they need to comply with an order to reclassify drivers as employees.
Now both companies now have until 5 p.m. PT on August 25 to file written statements agreeing to expedited procedures required by the order.

“While we won’t have to suspend operations tonight, we do need to continue fighting for independence plus benefits for drivers,” a Lyft spokesperson stated. “That’s the solution on the ballot in November, and it’s the solution drivers want because it preserves their ability to earn and to use the platform as they do now — whenever they want — while also getting historic new benefits. Without it, 80-90% of Californians who earn on app-based platforms will lose that opportunity.”

Lyft’s stock tumbled 8.5% at one after the news but regained roughly half the losses.

The injunction was part of a lawsuit filed by California’s attorney general and three city attorneys claiming that both Lyft and Uber skirted expenses for workers by falsely classifying them as contractors rather than employees.

California AG Xavier Becerra said, “California is home to millions of businesses and millions of workers. Every day, companies here protect their workers’ rights and benefits. California is America’s economic engine because innovation and worker rights go hand in hand. Any company that suggests otherwise is peddling a false choice.”

San Jose Mayor Sam Liccardo remarked, “We simply don’t want to see more people going without income, particularly when we know that there is a negotiated solution that we have here,” in an interview on CNBC’s “The Exchange.”