Uber, Lyft Win Delay on Converting Drivers to Employees (3)

Hours before Lyft Inc. and Uber Technologies Inc. were planning to suspend services in their home state of California, a state court gave them a reprieve.

On Thursday, a state appeals court ruled that the companies can keep operating as normal while challenging a judge’s order to comply with a state labor law. The law, in effect since January, mandates that the companies treat their workers in California as employees—a requirement that would upend the companies’ business models.

The decision Thursday comes just in time for the ride-hailing companies, which said they would stop doing business in the state rather ...