Ride-hailing giants Uber and Lyft won a last-minute reprieve on Thursday, when a California appeals court halted a judge's order requiring the two companies to reclassify their drivers as employees just hours before both Uber and Lyft had threatened to shut down ride share services in their home state.
The extension allows the two companies to continue operating while the court weighs their appeal, likely dragging out a fight over California's labor laws for months.
Earlier on Thursday, Lyft said it would suspend its operations in California at midnight, saying: "This is not something we wanted to do."
After an appeals court in San Francisco granted the stay, a spokesman for Uber said: "We are glad that the Court of Appeals recognized the important questions raised in this case, and that access to these critical services won’t be cut off while we continue to advocate for drivers’ ability to work with the freedom they want.”
Last week, a judge ruled that Uber and Lyft had until Friday morning to treat their drivers as employees - entitled to benefits including minimum wage, sick pay and unemployment insurance - rather than as independent contractors.
The companies had said they would be unable to comply with that mandate and complained that it couldn't have come at a worse time, as both Uber and Lyft suffer from a dramatic drop-off in business with many Americans sticking closer to home.
Uber shares finished Thursday up more than six and a half percent, while shares of Lyft were up more than five and a half percent at the close.