A judge has struck down California's Proposition 22.
The initiative overrode a California law that would have forced gig companies like Uber and Lyft to treat their workers as employees.
Instead, Proposition 22 allowed the companies to continue to treat workers as independent contractors.
In exchange, the companies would guarantee workers an hourly wage and offer them other benefits, while still allowing workers to set their own schedules.
The measure saw heavy financial support from the companies and was eventually approved by California voters last November with more than 6.3 million people voting in favor.
After the law passed, the Service Employees International Union (SEIU) and a group of drivers challenged the law in court, leading to today's decision.
The immediate impact of the decision to strike down Proposition 22 is not yet clear and the ruling is likely to be appealed.