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Lyft says it will continue service in California after court ruling

Lyft says it will continue service in California after court ruling
© Courtesy photo

Lyft said Thursday afternoon it will continue operating in California after an appeals court granted an emergency stay in a case, with the company reversing course after earlier saying it planned to cease operations in the state over a labor dispute.

The company had initially confirmed in a blog post that it would suspend its ride-hailing service in California at the end of the day Thursday, but it reversed the decision hours later after an appeals court granted a stay on an injunction while the case is being considered.

“While we won’t have to suspend operations tonight, we do need to continue fighting for independence plus benefits for drivers," company spokesperson Julie Wood said in a statement to The Hill.

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Top executives at Lyft had suggested last week that the company would cease operations in California after a court granted the preliminary injunction requiring it and fellow ride-hailing company Uber to classify their drivers as employees.

The decision had been on hold for 10 days to give the companies a chance to appeal.

Uber's CEO Dara Khosrowshahi has also threatened to suspend ride-hailing operations in the state but has so far declined to do so after Thursday's court ruling.

San Francisco Superior Court Judge Ethan Schulman ruled last week that Uber and Lyft must classify their drivers as full employees under Assembly Bill 5, a landmark law in California that establishes a test for determining whether workers can be classified as independent contractors.

Schulman sided with California Attorney General Xavier Becerra (D), who brought the lawsuit after the two ride-sharing giants resisted the law after it took effect in January, arguing their core business is technology rather than ride-hailing.

Lyft and Uber still have one chance to avoid giving their workers basic protections like a minimum wage and the right to organize.

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Both companies, along with other gig economy companies, have poured millions into Proposition 22, which would exempt them from the bill.

Although Proposition 22 would give some additional benefits to gig workers, the November ballot measure has faced strong pushback from drivers.

This is not the first time that ride-hailing companies have withheld their services in an effort to pressure local officials into watering down regulations, though the latest move comes amid broader economic turmoil caused by the coronavirus pandemic, with drivers standing to be most impacted by any suspension of services.

– This story was updated at 4:50 p.m. to reflect Lyft's reversed decision