Judge rejects Uber, Lyft bids to delay California driver reclassification

A California judge on Thursday dismissed requests from Uber and Lyft asking for more time to appeal his decision forcing them to classify drivers in their largest market as employees.

The ride-hail giants have argued that Judge Ethan Schulman of the San Francisco Superior Court’s decision would require them to restructure their businesses, but the judge said he found no reason to extend his Aug. 20 deadline for the companies to appeal Monday’s preliminary injunction.

“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.

Shares of Uber were trading down 0.9 percent Friday morning, while Lyft’s stock was down 1.6 percent.

The hearing came one day after the companies threatened to temporarily stop serving California, arguing that treating drivers as employees would undermine their business models.

Schulman’s ruling earlier this week was a major blow for the tech giants. Uber and Lyft have been accused of violating California’s Assembly Bill 5, which requires companies to classify their workers as employees if they control how workers do their jobs.

In a 34-page decision, Schulman slammed the companies’ “prolonged and brazen refusal” to comply with state law, and said the state showed an “overwhelming likelihood” it could prove Uber and Lyft classified drivers illegally.

Uber and Lyft have argued that they are not “hiring entities,” but instead provide technology that connects passengers and drivers. Schulman said there were many “glaring inconsistencies” in Uber and Lyft’s arguments, and that their “concerted effort” to overturn Assembly Bill 5 in the upcoming election is telling.

Uber and Lyft prefer using that classification for drivers, because treating them as employees would require benefits such as minimum wage, paid sick and family leave, unemployment insurance and workers’ compensation insurance.

Schulman added that if Uber and Lyft’s arguments prevailed, “the rapidly expanding majority of industries that rely heavily on technology could with impunity deprive legions of workers of the basic protections afforded to employees by state labor and employment laws.”

With Post wires. 

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