The California Supreme Court ruled last week to uphold a four-year-old ballot measure that classifies Uber and Lyft drivers as independent contractors rather than employees.

The measure, Proposition 22 was introduced to counteract Assembly Bill 5, a 2019 state law requiring gig companies to classify drivers as employees and to provide additional benefits. Initially passed by voters in 2020, the measure was overturned by a California Superior Court judge in 2021 but reinstated by three appeals court judges last year.

This higher court ruling allows Uber and Lyft to continue operating without reclassifying their drivers. Labor unions and their legislative allies, who sought greater rights for drivers, view this as a defeat.