Lyft

While the ruling does not take effect before a Nov. 3 company-sponsored ballot measure that will give voters the chance to decide over the future status of gig workers, it narrows the companies' options should their ballot fail. The case emerged after California implemented a law, known as AB5, aimed at reclassifying ride-hail, food delivery and other app-based workers as employees entitled to benefits such as unemployment insurance and minimum wage. California in May sued Uber and Lyft for no

The two ride-hailing companies would each face more than $392 million in annual payroll taxes and workers' compensation costs even if they drastically cut the number of drivers on their platforms, a Reuters calculation showed. The companies say they would need to significantly hike prices to offset at least some of those additional costs, which in turn would likely cause a decrease in consumer demand, but cushion the blow of the added costs to the bottom line.

Lyft in a blog post on Thursday said it would suspend its California operations at midnight. Uber in a blogpost said it would have to temporarily shut down unless the appeals court intervenes. Lyft shares dropped 6.2% to $26.41, while Uber shares were down 2.3% to $28.74.