Rideshare service rivals Uber and Lyft were given a temporary reprieve on Thursday from having to reclassify drivers as employees in their home state of California by Friday.
And appeals court granted their request to put a hold on a judge’s order that Uber and Lyft comply with a new labor law, on the condition they agree to speeding up procedures in a legal case to resolve the matter.
“The petitions are granted and the preliminary injunction is stayed pending resolution of Lyft and Uber appeals,” an appeals court said in its ruling.
Earlier on Thursday, Lyft said it will suspend its rideshare service in California rather than classify drivers as employees entitled to benefits under a new law.
The decision to sideline service by day’s end came as Uber and Lyft awaited a decision by an appeals court that could keep them from having to comply with the new law by Friday.
“This is not something we wanted to do,”Lyft said in a blog post.
A judge had given them until the end of Thursday to reclassify drivers as employees instead of independent contractors, which both companies argue is too complex and costly to do quickly.
“This change would also necessitate an overhaul of the entire business model – it’s not a switch that can be flipped overnight,” Lyft said.
Uber also had said it will likely suspend ride service in California if an appeals court does not put a hold on the judge's order.