Uber and Lyft have been dealt a major blow, as an appellate court has ruled the injunction against them was appropriate.
Uber and Lyft have been locked in a battle with California over the status of their drivers. California is trying to force the two companies, and other similar gig economy businesses, to treat their workers as employees, rather than independent contractors. This would provide them with benefits which, in turn, would significantly raise the cost of doing business.
In August a judge issued an injunction against the two companies, prohibiting them from operating until they had complied with the new regulation. The companies used the 10-day window they were granted to appeal, but the First Appellate District Court in San Francisco has ruled the injunction was appropriate.
“Not only is this a victory for the tens of thousands of Uber and Lyft drivers working to put a roof over their heads and food on the table, this ruling is about fairness, making it clear that these companies must stop shifting their costs onto the taxpayers while their CEO’s profit,” said Mike Feuer, Los Angeles City Attorney, according to Business Insider.
This makes the Proposition 22 ballot the best hope for the companies to continue doing business as they have. It’s a safe bet that should Proposition 22 fail, other states may look to follow California’s example.