Via CNBC:
Lyft will suspend service in California at 11:59 Pacific Time Thursday after a court granted a preliminary injunction last week requiring it to reclassify drivers as employees, the company said in a blog post. The injunction was stayed for ten days while the companies appealed, but is set to go into effect Friday.
Top executives at Uber and Lyft warned last week they would likely have to suspend service to comply with the court order, which would involve them restructuring their operations and re-hiring workers.
The injunction was part of a lawsuit filed by California’s attorney general and three city attorneys claiming Uber and Lyft skirted expenses for workers by falsely classifying them as contractors rather than employees. A judge granted the state’s request for an injunction, saying he was unconvinced the companies met one of the key standards of the new state labor law, Assembly Bill 5 (AB5), which says contractors must do work outside the normal course of the hiring firm’s business.
Uber had planned to continue operating its food delivery service in California even during the suspension period, an Uber executive told Eater last week. The injunction targets ride-hailing drivers, but scrutiny on food delivery services has already ramped up under AB5, with San Francisco’s district attorney suing the app-based delivery service DoorDash for misclassifying workers.