Ride-hailing companies Uber and Lyft will continue operating in California on Friday after an appeals court allowed them to at least temporarily continue to treat their drivers as independent contractors instead of employees with benefits.
Both companies had said that without the court ruling they would be forced to close Friday.
A California state law passed last year requires the change in the drivers’ status, but the issue has been winding its way through the court system since then.
In November, California will vote on an initiative to determine if the app-based businesses will be exempt from the state employment laws that require benefits, such as overtime and sick leave.
The appeals court will hear oral arguments on the status of the drivers in October, but a ruling is not expected before the November 3 election.
Both companies say they have sustained huge losses since the coronavirus pandemic.
The stock market welcomed the appeals court action, with Uber’s stock increasing almost 7% and Lyft up nearly 6%.