Gig Economy Feels Bite of California Law in Uber, Lyft Loss (1)

Uber Technologies Inc. and Lyft Inc. faced the direct consequences of California’s rigid law that makes it hard for companies to rely on independent contractors, with a court ruling that threatens the future of gig companies in the state.

A California court Monday ordered the ride-hailing giants to reclassify their drivers as employees, denying the companies’ pleas that they shouldn’t have to comply with Assembly Bill 5, a state law passed in 2019 that lays out three criteria a company must meet to deem workers independent contractors. The so-called “ABC test” roiled employers in the state, particularly those in the ...