Welcome to Axios Recap. I'm Naomi Shaven and I'm filling in for Dan this week.

Today is Wednesday, August 12th. The markets are way, way up, the UK's GDP is down, and we're

focused on the future of ride sharing.

On Monday, a California Superior Court judge ruled that Uber and Lyft should classify drivers as employees.

That would mean giving them paid sick and family leave, health benefits, and more.

The ride-sharing giants had been arguing that drivers were not part of their core business as technology companies.

They raised concerns that services could become far more expensive if drivers became employees, and that the drivers might also lose flexibility.

All the while, these drivers have become essential workers during this pandemic. The crisis has lent

major urgency to the calls for affordable health insurance and paid sick and family leave. And the

judge, it seems, was not moved by the idea that the drivers are anything but essential to these

companies too. The ruling was highly anticipated, as it has huge implications for the

ride-sharing industry and for the gig economy. And really, it's bigger than that, because these

modes of transportation and delivery that we have come to take for granted, and it could be argued,

long undervalued, have changed how people get around and get what they need, and even how

cities have allocated

resources for transportation. Both companies plan to appeal the ruling. Uber CEO Dara Kossra

Shahi has said that if this ruling stands, Uber will have to shut down in California, at least

temporarily, as it switches to a new employment model. Kastra Shahi, it's worth noting, wrote in an op-ed for the New York Times, published on Monday,

that he is in favor of granting more benefits to drivers while maintaining the independent contractor status.

To get a sense of what could come next in this legal battle and how it could start to impact the larger

gig economy ecosystem.

We're joined now by Mike Isaac of the New York Times and author of Super Pumped, The Battle for Uber.

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