[SAN FRANCISCO] Uber Technologies Inc and Lyft Inc failed to persuade a California appeals court to overturn a judge's order to comply with a state labour law that threatens to upend their business models.
The law, in effect since January, mandates that the companies treat their drivers in California as employees instead of independent contractors.
The decision Thursday comes as the ride-hailing companies are supporting a statewide ballot measure set for a vote in November that would partially exempt them from Assembly Bill 5.
"Our role in reviewing a decision to issue interim injunctive relief is a limited one, we address here whether the trial court abused its discretion in granting a preliminary injunction that restrains Uber and Lyft from classifying their drivers as independent contractors," the appeals panel said.
"Seeing no legal error, we conclude the trial court acted within its discretion and accordingly affirm the order as issued."