Uber and Lyft have been fighting to ensure they can classify their drivers as independent contractors, but a California judge’s ruling on Monday has placed the ride-sharing giants’ ability to continue business as usual in doubt.   

• The California Superior Court ruled drivers should be employees: The decision essentially validated a California gig-worker law that Uber and Lyft have not complied with since its passage last year. 

• Judge Ethan Schulman wrote that the Uber/Lyft business strategy was based on circular reasoning: "Were this reasoning to be accepted, the rapidly expanding majority of industries that rely heavily on technology could with impunity deprive legions of workers of the basic protections afforded to employees by state labor and employment laws."  

But it’s not over for Uber and Lyft yet

The ride-sharing companies plan to appeal the ruling. And California state officials have filed a lawsuit against them to force them to comply with the state law. Schulman wrote in his ruling California had an “overwhelming likelihood” of winning that suit.    

• Uber and Lyft maintain the majority of their drivers want to be independent contractors. Lyft said in a statement, “Drivers do not want to be employees, full stop.”  

The Verdict

Both the lawsuit and the Superior Court ruling could be nullified by a ballot measure this November. California voters will be asked whether they support the gig-worker legislation and could overturn the law.