A San Francisco Superior Court judge on Thursday denied Uber and Lyft's requests for more time to appeal the injunction granted on Monday
Judge Ethan Schulman said he found no reason to push back his 10-day stay on the injunction set to go into effect on August 20
Uber and Lyft have said they will appeal the latest ruling on the extension
It came one day after the heads of both companies said that they will be forced to shut down service if Monday's injunction isn't overturned
The injunction will require the companies to immediately reclassify their drivers as employees rather than independent contractors
It was filed as part of a lawsuit accusing Uber and Lyft of violating a state law
San Francisco's district attorney on Wednesday filed a similar preliminary injunction against DoorDash, which is also accused of violating the law
By MEGAN SHEETS FOR DAILYMAIL.COM and REUTERS 13 August 2020
A California judge has refused to grant Uber and Lyft more time to appeal his decision requiring the ride-sharing companies to classify drivers in that state as employees rather than independent contractors.
At a hearing in San Francisco Superior Court on Thursday, Judge Ethan Schulman said he found no reason to push back his August 20 deadline for the companies to appeal the preliminary injunction he issued on Monday before it could take effect.
'I am unconvinced that any extension of the 10-day stay is required,' Schulman said. 'Both applications are denied.'
Uber and Lyft have said they will appeal the latest ruling, which came one day after the heads of both companies said that they will be forced to shut down service if Monday's injunction isn't overturned.
The injunction came in a lawsuit where California Attorney General Xavier Becerra and the attorneys for Los Angeles, San Diego and San Francisco accused Uber and Lyft of violating Assembly Bill 5, a new state law making it harder to treat 'gig' workers as independent contractors.
San Francisco's district attorney on Wednesday filed a similar preliminary injunction against food delivery firm DoorDash, which is also accused of violating AB5.
A California judge on Thursday refused to grant Uber and Lyft more time to appeal his decision requiring the ride-sharing companies to classify drivers in that state as employees rather than independent contractors (file photo)
All three app-based companies have argued that their workers prefer the flexibility that comes with being classified as a contractor worker.
The companies have saved millions of dollars each year with the designation, because treating workers as employees would require benefits such as minimum wage, paid sick and family leave, unemployment insurance and workers' compensation insurance.
San Francisco Superior Court Judge Ethan Schulman (pictured) said he found no reason to give Uber and Lyft an extension on their 10-day deadline to file an appeal against the injunction he granted on Monday
Uber and Lyft have indicated that they will both have to suspend service in California for several months beginning on August 20 if the injunction goes into effect on that date.
'If the court doesn't reconsider, then in California, it's hard to believe we'll be able to switch our model to full-time employment quickly,' Uber CEO Dara Khosrowshahi told MSNBC on Wednesday.
'We will have to shut down until November.'
Lyft co-founder and president John Zimmer issued the same warning about a probable shutdown on a call with investors.
'We may appeal this ruling and request a further stay. If efforts here are not successful, we would be forced to suspend our operations in California,' Zimmer said.
Becerra balked at the threats of Uber and Lyft leaving the state in an interview with CNBC on Tuesday.
'Any business model that relies on shortchanging workers in order to make it probably shouldn't be anywhere, whether California or otherwise,' he said.
Uber may be forced to stop California operations after court ruling
Uber CEO Dara Khosrowshahi is pictured in an MSNBC interview on Wednesday, where he warned that the ride-sharing company could be forced to shut down service in California for several months if a state court does not overturn a ruling requiring it to reclassify its drivers
In his Monday ruling, Schulman concluded that there is an 'overwhelmingly likelihood' that the Uber and Lyft are in violation of AB5, which requires companies to classify workers as employees if they controlled how workers did their jobs, or the work was part of their normal business.
Lawyers for the firms had said they are not violating the law because drivers are not fundamental to the business, arguing the companies are 'multi-sided platforms' whose activities encompass much more than transportation.
But Schulman rejected that argument, writing that it 'flies in the face of economic reality and common sense' and assailing the companies' 'prolonged and brazen refusal' to comply with state law.
He also addressed the companies' gripe that restructuring will take a long time and cost a lot of money, saying that low ridership during the pandemic means that now could be the best time for them to make changes.
Neither Uber nor Lyft is profitable, and both have suffered steep ridership declines during the coronavirus pandemic.
Shares in both firms took a hit on Thursday afternoon, with Uber's down 0.9 percent and Lyft's down 4.8 percent. Lyft had reported dismal second-quarter results late on Wednesday, fueling the drop.
Labor advocates praised Schulman's ruling as a milestone in their fight to apply traditional worker protections to a fast-growing segment of the labor force.
'This is a resounding victory for thousands of Uber and Lyft drivers who are working hard - and, in this pandemic, incurring risk every day - to provide for their families,' Los Angeles City Attorney Mike Feuer said in a statement.
California Attorney General Xavier Becerra (right) and Los Angeles City Attorney Mike Feuer (left) are leading the state's lawsuit against Uber and Lyft. After their injunction was granted on Monday, Feuer said: 'This is a resounding victory for thousands of Uber and Lyft drivers who are working hard - and, in this pandemic, incurring risk every day - to provide for their families'
Both Uber and Lyft have pledged to spend more than a hundred million dollars to support a November ballot measure, Proposition 22, that would exempt them from AB5. Pictured: Drivers protest the proposition on August 6 in Los Angeles
San Francisco District Attorney Chesa Boudin filed a lawsuit accusing DoorDash of violating AB5 in June, and on Wednesday sought an injunction against the company.
'We are seeking an immediate end to DoorDash's illegal behavior of failing to provide delivery workers with basic workplace protections,' Boudin said.
'All three branches of California's government have already made clear that these workers are employees under California law and entitled to these important safeguards.'
A DoorDash spokesman responded to the motion by saying it was ill-timed and that the company's internal data suggested the majority of its workers wanted to remain as contractors.
'In the midst of one of the deepest economic recessions in our nation's history, today's action ... threatens billions of dollars in earnings for California Dashers and revenue for restaurants that rely upon sales from delivery to keep their businesses open', the spokesman told Reuters.
If the injunction is granted, DoorDash is expected to file an appeal.
Should they lose their respective appeals, Uber, Lyft and DoorDash will have to refocus their fight on a November ballot measure, Proposition 22, which would exempt certain gig economy companies from AB5.
Together with Instacart and Postmates, the companies are spending more than $110million to promote Proposition 22 and ensure that it passes.
DoorDash is facing an injunction to reclassify its California contractors as employees - marking the latest effort by state prosecutors to force gig economy companies to provide benefits to their workers, including health insurance, paid time off and sick leave (file photo)
Uber CEO Khosrowshahi has warned that permanently restructuring its operations in California would result in 'much smaller service [and] much higher prices', hurting both drivers and customers.
'That's a reality, so it's not a game of chicken one way or another,' he said. 'It's really up to the courts and we're going to comply with the law, and we will look to get going again.'
He said that service would have to pause for a few months, and when it resumed it would be much more limited and concentrated in cities rather than suburbs.
Khosrowshahi penned an op-ed in the New York Times over the weekend calling for states to require all gig economy companies to establish benefit funds for their workers instead of forcing them to classify workers as employees.
He called the current employment system 'outdated and unfair' and said it 'forces every worker to choose between being an employee with more benefits but less flexibility, or an independent contractor with more flexibility but almost no safety net'.
'Uber is ready, right now, to pay more to give drivers new benefits and protections,' Khosrowshahi wrote.
'But America needs to change the status quo to protect all workers, not just one type of work.'
Judge blocks Uber and Lyft from classifying drivers as contractors
California judge DENIES Uber and Lyft's requests for more time to appeal injunction
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