Stop! Go! After Back and Forth, Lyft and Uber Win Stay in California

Tami Abdollah

Tami Abdollah was dot.LA's senior technology reporter. She was previously a national security and cybersecurity reporter for The Associated Press in Washington, D.C. She's been a reporter for the AP in Los Angeles, the Los Angeles Times and for L.A.'s NPR affiliate KPCC. Abdollah spent nearly a year in Iraq as a U.S. government contractor. A native Angeleno, she's traveled the world on $5 a day, taught trad climbing safety classes and is an avid mountaineer. Follow her on Twitter.

Stop! Go! After Back and Forth, Lyft and Uber Win Stay in California

An appeals court granted Uber and Lyft a reprieve on Thursday, hours before the California rideshare giants were poised to make good on their threats to suspend operations in their home state.

The move would have left hundreds of thousands of drivers in one of their largest markets without employment during a global pandemic and passengers stranded. Alternative ridesharing operations are ready to roll, but before we get to that here's a run down of what happened.

The appeals court's 11th hour decision enables the two Silicon Valley-based companies to continue operating — without classifying their drivers as employees - as the court weighs their appeal.

The planned suspension was the next step in a months-long saga that has played out in Sacramento and in the courts, as the two multi-billion-dollar companies have pushed back against a new law that requires them to classify their drivers as employees rather than independent contractors.

"The vast majority of drivers want to work independently, and we've already made significant changes to our app to ensure that remains the case under California law," an Uber spokesman told dot.LA on Thursday. "When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression."

Lyft's plan to suspend its operations by midnight came one week after a court granted a preliminary injunction, requiring Uber and Lyft to stop classifying their drivers as contractors.

In a blog post, Lyft said that four out of five drivers do not support the court's revised employment model. The company also argued in its post, as it has in court, that "this change would also necessitate an overhaul of the entire business model — it's not a switch that can be flipped overnight."

Leaving California would be a political bet for the two companies hinging on jilted riders and drivers being upset enough to push for a change in the law in the future.

Such a bet has worked in some markets, notably in Austin, Texas. In 2016, Uber and Lyft left town in protest of a package of new rules and regulations that would require deeper background checks for drivers, including fingerprinting. After expensive lobbying and marketing campaigns at the Texas statehouse, Republican Gov. Greg Abbott signed a new law in 2017 that included background checks without fingerprinting. Uber and Lyft returned shortly thereafter.

Lyft is actively encouraging customers to vote yes on Prop. 22 in November, which would offer new benefits to drivers and exempt app-based ridesharing companies from having to classify drivers as employees.

Lyft and Uber said last week that they would likely pause business to comply with the order. Uber originally mentioned plans to continue running its food delivery service despite a potential suspension of its ridesharing service.

The reprieve for riders and drivers in the Golden State may be temporary.

For those worried about what may come, here are some alternative ridesharing options:

  • Hail a ride or schedule one in advance with RideYellow, the app letting riders pay with cash or card for transportation across L.A.
  • Wingz, once known for it's airport rides, has expanded its operations to offer around-town transportation.
  • For charter and party bus services, Swoop offers a range of vehicles depending on your destination and group size.
  • While carpooling to work is put on a temporary pause for many, Scoop's model links co-workers and neighbors traveling in the same direction.
  • With Waze Carpool users can choose carpool companies based on their profiles, star ratings and filters like co-workers only or same-gender.
  • Rides for children with vetted drivers are offered by both HopSkipDrive and Kango Each trip can be closely monitored through the app.
  • Blacklane offers a higher-end car service.
  • And while Lyft is taking a ridesharing hiatus, you can still access its scooters in Santa Monica and UCLA and rent a car through the Lyft app.

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S.C. Stuart
S.C. Stuart is a foreign correspondent (ELLE China, Esquire Latin America), Contributing Writer at Ziff Davis PCMag, and consults as a futurist for Hollywood Studios. Previously, S.C. was the head of digital at Hearst Magazines International while serving as a Non-Executive Director, UK Trade & Investment (US) and Digital Advisor at The Smithsonian.
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