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California Public Utilities Commission, an agency that regulates app-based transportation companies among others, decided that drivers for ride-hailing companies are now presumed to be employees and not independent contractors, as long as a court decision does not interpret the new state AB.5 law differently. Lyft, Uber and other ride-hailing companies have contested the order claiming that it would jeopardise their business model, raise the price of rides and limit trips to rural areas. They also argued that most of their drivers do not want to be classified as employees, preferring the flexibility of their independent contractor status.
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