Ride sharing companies Uber and Lyft have failed to convince separate US judges that people driving cars and sharing their rides are not employees of the company, but contractors instead, Reuters reports.
U.S. District - Judges Edward Chen and Vince Chhabria - in San Francisco federal court said in two rulings that juries would have to determine the status of each company's drivers.
Both companies are facing lawsuits, after their drivers claimed they are, in fact, employees of the companies and that they are entitled to reimbursement for expenses, including gas and vehicle maintenance. The drivers currently pay those costs themselves.
If the jury decides that they are employees, the companies will have to pay Social Security, workers' compensation, and unemployment insurance for the drivers, raising the cost beyond the lawsuits’ scope.
Uber, Lyft and lawyers for the plaintiffs did not immediately respond to requests for comments on the ruling.
In Wednesday's ruling, Judge Chhabria admitted it will be a tough choice, as the drivers can be seen as both contractors and full-time employees.
"The jury in this case will be handed a square peg and asked to choose between two round holes," the judge wrote.
"California's outmoded test for classifying workers will apply in cases like this. And because the test provides nothing remotely close to a clear answer, it will often be for juries to decide."
Uber is currently the most valuable US start-up, after it managed to raise more than $4 billion (£2.6 billion) from prominent venture capital firms.