A flurry of notifications lighted up the phones of Lyft and Uber users in California early this week.

 

A California appeals court granted an emergency stay Thursday allowing Uber and Lyft to continue operating under their current model temporarily.

The judge, Ethan P. Schulman, dismissed both companies’ initial appeals last week. Uber and Lyft filed pleas for immediate stays to a California court of appeal, which had been expected to rule as soon as Wednesday. The court could grant the appeal and impose a stay on Schulman’s injunction for some period of time, or it could decline to issue a ruling, which would mean the Thursday expiration date would remain in place.

The court battle began with a lawsuit brought by state Atty. Gen. Xavier Becerra in May alleging that by misclassifying drivers as independent contractors, the companies deprived them of worker protections and benefits such as a minimum wage and unemployment insurance.

Uber and Lyft have indicated any shutdowns could continue through the November election, when California voters will decide on a ballot initiative that would largely undo AB 5 by carving out a new category of work for drivers. The companies have spent millions on the initiative and an advertising campaign to support it.

Uber is not planning to halt operations for its delivery service, Uber Eats, because Becerra’s lawsuit did not specify drivers for that platform, the company said. Uber’s delivery orders have more than doubled in the second quarter, with Americans relying on deliveries to avoid exposure to the coronavirus during the pandemic. At the same time, ride-hailing trips have taken a significant hit, down 75% from last year.

San Francisco’s district attorney sued food delivery app DoorDash in June, alleging worker misclassification. Uber said it anticipates a similar fight on this front.

Read More