The Financial Times reports that a California Superior Court judge has ruled that Uber and Lyft drivers in the state must be classified as employees, not independent contractors, in what the story says may be "the most significant blow yet to the gig economy business model unless it is halted by an appeals court."
The California Attorney General had sought the reclassification, arguing that "drivers were facing immediate harm because they did not get sick pay or other employee benefits."
FT writes that "Superior Court Judge Ethan Schulman granted a preliminary injunction ordering the reclassification, which would immediately enforce a law enacted last year that Uber and Lyft say will make their businesses unworkable in the state. He stayed the injunction for 10 days, however, during which time the companies have said they will appeal."
The ruling could end up being moot. There is a statewide ballot measure on which California voters will be weighing in that would, FT writes, "exempt app-based workers from the law cited in the current case. Uber, Lyft and other gig economy companies have committed more than $100m to campaign for the exemption."
