A protester stands outside the California labour offices in Los Angeles, California. Picture: MARIO TAMA/GETTY IMAGES
A protester stands outside the California labour offices in Los Angeles, California. Picture: MARIO TAMA/GETTY IMAGES

San Francisco  — Ride-hailing companies Uber Technologies and Lyft failed to persuade a judge to put an extended hold on his order converting their California drivers to employees while they appeal.

At the urging of California’s attorney-general, San Francisco superior court judge Ethan Schulman on Thursday refused to indefinitely pause the injunction he issued this week while the companies ask higher courts to review it.

The appeals process could take years in a case that threatens the business model for the ride-hailing giants and the gig industry as a whole. The companies can ask a state appeals court to overrule Schulman and keep his August 10 order on hold beyond its 10-day expiration.

The decision comes a day after Uber CEO Dara Khosrowshahi and Lyft President John Zimmer said their companies might need to temporarily shut down in California if forced to change their business models and provide drivers with costly benefits including health insurance and overtime.

Uber and Lyft said they plan to go to the appeals court quickly to get the hold on Schulman’s ruling extended.

“The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law,” Uber spokesperson Matt Kallman said in an e-mail. “When over 3-million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression.”

Uber and Lyft, along with Postmates, Instacart and DoorDash, are supporting a ballot measure set for a statewide vote in November that would exempt app-based transportation and delivery companies from the law known as assembly bill 5.

Bloomberg

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