Lyft, Uber Get Last-Minute Reprieve Before They Would Have Canceled Services in California

Lawmakers and courts are trying to force them to put drivers on their payrolls. They're threatening to take a freeway out of the state entirely.


Rideshare services Lyft and Uber—and more importantly their freelance drivers and customers—dodged a bullet today as a judge decided to allow to companies to continue classifying their drivers as independent contractors while a court battle wages on.

Both companies publicly announced that they would be ending their services in California rather than complying with legislation (the controversial A.B. 5) and a recent court ruling ordering them to classify their drivers as employees by Friday.

Uber officials had warned that complying with the law would drive costs up so much that consumers could end up paying as much as 111 percent more for rides in some places. In a blog post from Lyft today explaining they'd be shutting down, they said the changes would result in 80 percent of their drivers losing work in California and passengers seeing reduced services in suburban and rural areas.

And so, facing an intractable California government lobbied heavily by labor unions and hostile to a freelance economy, Uber and Lyft threatened to take their balls and go home.

Today's ruling will delay the classification order and will allow them to continue operating until at least mid-October, where they'll continue to attempt to argue in court that they should not have to treat drivers as conventional employees. They will, however, also have to submit plans to the court explaining in advance how they plan to comply with the ruling should they lose.

"We are glad that the Court of Appeals recognized the important questions raised in this case, and that access to these critical services won't be cut off while we continue to advocate for drivers' ability to work with the freedom they want," an Uber spokesman said in a prepared statement.

California voters will get to weigh in themselves come November about whether these drivers can remain independent. Proposition 22 would exempt rideshare and delivery drivers from A.B. 5. Instead it would implement some other measures for freelance drivers like an earnings guarantee for time worked, compensation per mile, and health care subsidies.

In exchange, drivers will get to keep the ability to set their own hours and be their own bosses. This is what many freelance workers actually want and rely on this flexibility as part of their livelihoods. Read more about the terrible impacts of A.B. 5 on the work of freelancers and why people want to be their own bosses and not embrace typical employer-employee relationships in the August/September issue of Reason here.

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74 responses to “Lyft, Uber Get Last-Minute Reprieve Before They Would Have Canceled Services in California

  1. They will, however, also have to submit plans to the court explaining in advance how they plan to comply with the ruling should they lose.

    They’ve already told you. They’ll leave.

    1. But you can never leave Hotel California.

      1. You can check out any time like – – – –

        1. California, the roach motel of US states.

          1. Explains why they keep sending that Witchy Woman back as Speaker.

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        2. You can check out any time like…

          “But you’ll still have to pay the ‘Wealth Tax’ for ten years after you do.”

      2. Many people and businesses are Already Gone.

        1. Thanks to Newsom I already have to eat my lunch all by myself.

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    2. I’m thinking the courts might not accept that answer. California doesn’t like people voting with their feet.

      1. I’m thinking the court has no business basing its decision on their future plans, and is trying to set up a perjury trap.

        1. That actually makes a lot of sense.

      2. they’ll be forced to give people rides for 10 years after they leave

        1. “Providing rides is part of your wealth and so we’re taxing you on it.”

    3. It’s time to out an end to progressive rule. How much more are we going to take?

      1. It’s California. Most people are progressive here. They’re part of the tribe. They might not like the treatment of Lyft and Uber, but they vote how the tribe tells them to vote.

        One reason why is that the California Republicans fucked it up. Not all of them. But a virulent anti-immigrant faction shit in the punch bowl and a state full of naturally conservative Latinos told them to bugger off. It was their number one issue in a state that wasn’t rabid about it. It’s not that it was the wrong issue, it was that they messaged it in such a bad way that they turned people off.

        90% of the counties are Republicans, but you can’t win an election where the other 10% are in the dense urban Los Angeles Metroplex and SF Bay Area. The party ignored the big cities. They did absolutely zero outreach to Blacks, very little to Latinos, and essentially ignored anyone younger than 30.

        Now parties are fossils as it is. No one expects them to be hip and savvy and inclusive. So some of the blame has to go to the Democrat Party which has an old school style political machine going on. But the blame has to rest of the Republicans who insist on living back in the seventies.

        I was a member of that party, dues paying member, central committee member, convention delegate, activist, all that stuff, for ten years. And I could tell you stories to make your head spin.

        Could the party come back? Sure, but it needs to stop pretending it’s in Kansas. It needs to completely shed its social conservative puritanism. It needs to get its average member age down form 70 to closer to 50. It needs to stop insulting the Latinos of the state. But most importantly, it needs to realize that the demographics are that California is an urban state and start acting like it.

        Pork for Farms is not longer a ticket to Sacramento. Hell, hard to compete with the Democrats when you’re whole shtick is promising ever larger chunks of dole.

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    4. This. It’s not like they’ve been subtle about it.

      “We’re out.”

      “No, no wait! Just hang on for a bit so we can properly propagandize so we don’t all get thrown out of office for putting you out of business!”

  2. I enjoy watching Cali destroy itself. You would think that informs people to avoid one party rule. But no we may have to take this National just to drive the point home.

    1. The problem is that both parties stink. Government minds so much of our daily lives that there is no point in basing one’s vote on any single policy, so all the woke people choose the woke candidates, even though 90% of what they get displeases them. But the other party would displease 91% of the time.

      1. I live in California and there’s only one party. I’ll be leaving as soon as I retire. At least my 401k will stay out of their clutches.

        1. Don’t bet on it: they have been talking about taxing people’s wealth after they leave the state.

        2. I though about moving out after retirement, but the problem is that no other state wants us. I know some ex-pats in Idaho, Nevada, Texas, etc., and they basically have to keep mum about their origin. The only safe place is another Democrat state. And even they are starting to get wary.

          1. Too many people who generally liked the CA political scene, but wanted to move somewhere cheaper, and then voted to make the place they moved to exactly like the place they moved away from.

            1. Californian fleeing California: “We have met the enemy, and he is us.”

    2. You would think that informs people to avoid one party rule.

      Right, it’s one-party rule that causes destruction, which is why Texas is in such awful shape in its 17th year of one-party rule.

      1. You are misunderstanding. The Republicans hold Texas. However, they are under no illusions. They know that we will dump them if they do not perform up to snuff. On the contrary, the Democrats hold power in California, and they know that they are essentially untouchable no matter what they do.

        You get the benefits of competition so long as there is a race, even if the winner does not change.

        1. So, with Michigan, Minnesota, and Pennsylvania having competition (as amply demonstrated by the fact that they don’t have state government trifectas), they’re going to be as well-off as Texas?

          Yeah, see, no, I’m not the one who’s misunderstanding what’s going on.

          1. No. Don’t put words into my mouth and don’t oversimplify things. It’s one requirement out of many (mostly, reasonable people at the top willing to compromise and look to the future).

      2. One party rule in California means that the Democrats have a super majority. There party chiefs literally run the state. Ten years ago the Republicans could fight bills and stuff, now it’s impossible. Democrats don’t even care what the few Republicans think any more, what they want happens. And they control the “independent” districting so their seats are permanent.

        Texas does not have that. Texas still has to play nice with Democrat voters.

  3. Since the new deadline is still before the vote, those companies should just go ahead and shut down.
    I suspect they will lose less revenue in lost business between now and the vote than they will spend dealing with the “common sense regulations” of explaining how they will handle the change they cannot make.

  4. “When bulls fight, only the grass suffers.”

    And in this case, it’s only one bull, and boy, are they going to make sure the grass suffers for daring not to be “employees.”

  5. Please. Stop “helping.”

    Sincerely, freelancers everywhere.

    1. So much this. Just leave us alone!

  6. I’ve heard this law also affect freelance writers thus speeding up the ruination of newspapers. I don’t know if I care but

    1. You are absolutely correct. I do not remember all the specifics, but as I recall, Vox was running articles lauding this law prior to it passing, and then lost more than half of their writers after it passed. Those lefties out in Cali are so ignorant, they’d cut off their finger because of a hangnail…but they’re WOKE.

      1. The original AB5 stated that you could only submit 35 articles to one place before you were an employee. They arrived at this by thinking “If 1 article a week is full time, then 35 must be part time!” Of course, knowing nothing about writing things on the internet, they don’t realize that many times an “article” takes an hour or less. In what world is an hour a week a “part-time employee”?

        A whole bunch of other professions were similarly eviscerated, and now they are handing out exemptions to the people who have enough clout to get facetime with the rule-makers. Whatever could go wrong?

    2. it ruined sports blogs too. but they were already pretty bad.

  7. CA to gig employers: FYTW

    Gig employers: Get out of my car.

    1. They’re no Billy Ocean, I tell you.

  8. Uber and lyft didn’t get a reprieve, the people who use the service and the drivers got a reprieve. If CA changes the rules then Uber and lyft loose nothing by leaving the market

    1. Huh? The drivers, the customers, and the companies (Uber and Lyft) all got a reprieve, in that they will continue (for now) to be able to engage in activity that is advantageous to them.

    2. The insane mind of the Rev at work.

      1. Wrong rev; that’s a parody

  9. Shutting a company down because you don’t like their paychecks: that’s violence.

    1. So them anything done to a progressive in response is just self defense.

        1. Oooo, someone crawled out of the cluster-B cesspit of Balloon Juice to grace us with their presence!

    2. They are shutting it down because the government doesn’t want to pay for their employees healthcare.

      1. …As-if the government actually produced anything to “pay” for anything.

  10. Let CA feel the consequences of their policies. More and more businesses are just leaving. At some point, CA will run out of other people’s money to spend.

    1. They’re trying to shift unconsionble levels of borrowing onto the Federal debt heap, along with other states.

      Expect this and trillions more borrowing if, after the election, we have no more divided government.

      At least most of Trump’s agenda has been rebuffed through normal, if unusually hot air-driven, political processes.

  11. I wish they’d leave CA anyway, just for that threat.

  12. They SHOULD walk. And the citizens of California should tell the government what they think about that. Perhaps we can bring back the tar and feathers?

    1. The citizens of CA elected these policies!!!!! Allowing them to RUN from their idiocy won’t make them any smarter.

      1. Democracy is the theory that the common people know what they want, and deserve to get it good and hard.

      2. In CaliLand you wake up one day and they have replaced Brown with Newsom. No memory of an election.

  13. Well hopefully a suitable compromise can be reached in time.

    1. Yeah, they’ll leave.

  14. one party rule. it begins.

    things will only get worse from here. Wait til the wealth tax bill gets passed.

  15. You have to join the DEMOCRATIC LABOR UNION!!!!
    The party of liberals? liberty? It’s shocking how the left defies word meanings.

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  17. They will, however, also have to submit plans to the court explaining in advance how they plan to comply with the ruling should they lose.

    “We intend to fully comply with the order if given: all of our California drivers will be reclassified as employees–that is, all zero of them.”

  18. Comrade, you will join the democratic labor union.
    The Party has spoken

    1. Voluntary compulsion? Compelled voluntary choice?

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  20. Uber and Lyft should search their customer databases for California politicians who support this legislation, and make sure that there are, unfortunately, no cars available when they need a ride.

    1. There’s some tracking I could get behind!

Comments are closed.