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Uber and Lyft almost shut down in California and here's why Canada could be next

Uber and Lyft narrowly avoided a shut down in their home state of California on Thursday amid a heated legal battle. 

Last week, a California court ordered the companies to reclassify their drivers in the state as employees rather than independent contractors by Friday, Aug. 21. 

Lyft threatened to suspend service in California by end of day on Thursday if an appeals court did not grant its request to delay the order to reclassify its drivers. 

"This is not something we wanted to do, as we know millions of Californians depend on Lyft for daily, essential trips," wrote the company in a blog post. 

Uber also said that they would suspend services by midnight on Thursday if not granted a similar delay. 

According to Reuters, a California appeals court narrowly avoided the shutdown by halting the court order and granting  Uber and Lyft a temporary reprieve. 

Being considered employees rather than independent contractors would mean that drivers would be granted certain standards around vacation and overtime pay as well as benefits and minimum wage.

Meanwhile, the companies are also facing similar legal actions here in Canada. 

In June, the Supreme Court of Canada ruled that drivers can have labour issues resolved through Ontario courts, which could lead to Uber drivers being seen as employees under Ontario's Employment Standards Act.

The court sided with David Heller, a former Uber Eats worker, who has been trying to secure employee status for those who drive for the app. 

The lawsuit alleges the drivers were employees under the law, that they were misclassified as independent contractors by Uber, and were therefore owed various entitlements under Ontario and Canadian employment laws.

"The Supreme Court of Canada's message is very clear: if you wish to operate in this country, you have to be prepared to abide by the laws of Canada and adhere to the jurisdiction of its courts," said employment lawyer Lior Samfiru of Samfiru Tumarkin LLP, who commenced the class action in 2017 on behalf of Uber drivers.

The class-action suit is asking for damages for anyone who has worked for the app in Ontario since 2012.

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