Uber, Lyft get reprieves in reclassifying drivers as employees

An appellate court granted Uber Technologies Inc and Lyft Inc reprieves from an order forcing them to reclassify their drivers as employees.

Uber and Lyft threatened to suspend their services in California unless a judgment by an appeals court keeps them from treating their drivers as employees rather than independent contractors.

An injunction order was issued by a judge last week forcing both companies to treat drivers as employees entitled to benefits including minimum wage, sick pay, and unemployment insurance, beginning Thursday,

Both Uber and Lyft claimed it would take them months to implement the order.

The companies then sought the intervention of an appeals court to block the order.

Uber's food delivery business Eats would not be impacted by the shutdown, which comes when demand for rides has plummeted due to the pandemic.

California represents 9 percent of Uber's rides and food delivery bookings.

For Lyft, California makes up some 16 percent of total rides. It does not have a food delivery business.

Both companies claim that a vast majority of their drivers do not want to be employees and that their flexible on-demand business model is not compatible with traditional employment law.

Labor groups rejected the claims that employment laws are incompatible with flexible work schedules and insist they follow the same rules as other businesses.

They advocate for what they call a "third way."

Lyft and Uber, along with DoorDash, Instacart, and Postmates are spending over $110 million to support a California ballot measure that would enshrine their proposal for a "third way" between employment and contractor status.

A poll among Californians conducted on Aug. 9 by Refield & Wilton revealed that 41 percent of voters would support the "third way" proposal, and 26 percent would oppose it, with the remainder still undecided.