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(Reuters) – California plans to ask a state court judge to force Uber Technologies (NYSE:UBER) Inc and Lyft Inc (NASDAQ:LYFT) to classify their ride-hail drivers as employees rather than contractors, ratcheting up the tension over a new gig worker law.
Shares of both companies fell about 7%. A hearing for the matter was set for August 6.
In a filing in the Superior Court of California in San Francisco on Wednesday, lawyers for California Attorney General Xavier Becerra said their office will file a request for a preliminary injunction.
Uber in a statement said most drivers preferred the independence afforded by working as contractors and that it calculated over 158,000 Uber drivers in California would lose work if the reclassification happened.
Lyft and the office for the state’s attorney general did not immediately respond to a request for comment.
