(Reuters) – Drivers working for ride-hailing services such as Uber Technologies Inc (UBER.N) and Lyft Inc (LYFT.O) will be considered employees under California’s new gig worker law, the state’s leading industry regulator said on Thursday.
FILE PHOTO: Uber’s logo is pictured at its office in Bogota, Colombia, December 12, 2019. Picture taken December 12, 2019. REUTERS/Luisa Gonzalez/File Photo
Shares in Uber and Lyft fell 5.3% and 4.2%, respectively, in early trading, with the new order striking at the heart of the “gig economy” business model of technology platforms like Uber and Lyft that rely on cheaper contract workers.
The decision, by the California Public Utilities Commission (CPUC), which regulates ride-hailing companies across the state, comes six months after a state law took effect that makes it tougher for companies to classify workers as contractors rather than employees. The latter designation exempts them from paying for overtime, healthcare and worke