UPDATED: Lyft and Uber have won a reprieve and will not suspend operations in California for now.
Earlier, Lyft said it would suspend operations in California beginning Thursday, Aug. 20, 2020 at 11:59 pm PT, pending a stay from the Court of Appeals. The ride-share companies received a last-minute stay and will continue to operate.
Lyft and Uber were ordered to suspend operations in a court order issued Aug. 10 echoing the words of a lawsuit filed by California Attorney General Xavier Becerra in May against the ride-share companies.
The company makes its announcement following communications with lawmakers.
In his Aug. 10 order, Ethan Schulman, San Francisco superior court judge, dramatically said that Uber and Lyft are not entitled to an “indefinite postponement of their day of reckoning.”
Schulman said the companies are violating A.B. 5, the new California law (as of Jan. 1. 2020) that requires them to give drivers benefits including health insurance.
Uber, Lyft and DoorDash raised $100 million to get a related gig-economy initiative, Prop 22 on the November ballot, and i the voters say yes, the contractor law could take effect in January.
In a blog post, Lyft put out pointers on what is at stake:
“What Sacramento politicians are pushing is an employment model that 4 out of 5 drivers don’t support,” Lyft wrote. “This change would also necessitate an overhaul of the entire business model — it’s not a switch that can be flipped overnight.”
Lyft says in this new model that politicians are “pushing”
• Passengers would experience reduced service, especially in suburban and rural areas
• 80% of drivers would lose work and the rest would have scheduled shifts, and capped hourly earnings.
• Lower-income riders trying to make it to essential jobs and medical appointments would be faced with unaffordable prices (38% of Lyft rides in California begin or end in low-income areas that have few transit options already).
“We are going to keep up the fight for a benefits model that works for all drivers and our riders,” the company wrote. “We’ve spent hundreds of hours meeting with policymakers and labor leaders to craft an alternative proposal for drivers that includes a minimum earnings guarantee, mileage reimbursement, a health care subsidy, and occupational accident insurance, without the negative consequences.”
San Jose Mayor Sam Liccardo told CNBC: “We simply don’t want to see more people going without income.”
He suggested a portable benefit