On Thursday, a California judge denied motions by Uber and Lyft to delay a previous injunction ordering the ridesharing companies to reclassify their contractors as full-time employees. That ruling goes into effect on August 20, to which the companies had requested a 10-day extension in order to attempt an appeal.
“I am confident that the court of appeal is capable of acting very quickly where it is necessary for it to do so. I am unconvinced that any extension of the 10 day stay is required. Both applications are denied,” said Judge Ethan Schulman at the San Francisco Superior Court hearing per Vice.
It looks like Uber’s corporate tantruming fell on deaf ears. After Schulman mandated on Monday that Uber and Lyft reclassify their drivers, Uber CEO Dara Khosrowshahi threatened to halt operations in its home state if it’s forced to give drivers the kinds of basic benefits legally required of employees such as overtime and unemployment insurance.
“If the court doesn’t reconsider, then in California, it’s hard to believe that we’ll be able to switch our model to full-time employment quickly. So I think that Uber will shut down for a while,” Khosrowshahi said in an interview Wednesday with MSNBC’s Stephanie Ruhle.
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And Uber likely wouldn’t be the only one: On an earnings call that same day, Lyft President John Zimmer said the company would also be suspending services in California if this week’s ruling wasn’t overturned.
The two ridesharing companies have repeatedly argued that such a drastic change to their business practices would be extremely costly, but it’s not as if they haven’t had time to prepare for the transition. Monday’s ruling forces them to comply with California watershed Assembly Bill 5, which state legislators passed almost a year ago at this point. The bill mandates that “transportation network companies” like Uber and Lyft stop misclassifying their workforce as independent contractors if their drivers lack any of the self-determination that such a distinction entails and provide the same benefits and protections entitled to employees.