In a new episode of the ongoing battle with regulators over workers benefits, a California court ruling announced on Monday reversed Proposition 22 and made Uber and Lyft shares rise.
A California court ruling on treating drivers announced on Monday made Uber Technologies and Lyft Inc shares rise.
The Proposition allowed for app-based drivers to be classified as independent workers instead of employees.
Proposition 22 could be replaced with AB5, if the former was withdrawn. In this case, firms will be required to reclassify drivers as employees.
Consequently, they will be granted full benefits in addition to hourly pay. This ruling removes some regulatory obstacles facing companies.
It is estimated that ride-hailing firms have saved between $20 million and $170 million with this new regulation. It is also expected other states might follow the lead of California.
This has been an ongoing battle with regulators over the proper benefits and compensation for their workers who are do not receive the same legal protection of employers.
