- Uber and Postmates's lawsuit against the state of California suffered a big setback on Monday
- A Los Angeles judge rejected a bid to temporarily block California's gig-worker law from going into effect while Uber and Postmates challenge it in court.
- Gig-economy companies like Uber and Lyft have been fighting fiercely to block Assembly Bill 5, which is aimed at giving wage and benefit protections to people who work as independent contractors.
- The ruling means that the new law will be enforced while Uber and Postmates sue the state of California, and could have serious financial effects on both companies.
- A statement from Uber reiterated the company's commitment to continuing to challenge the case in court.
- Visit Business Insider's homepage for more stories.
Postmates and Uber's lawsuit against California hit its first bump on Monday, as the two companies lost a preliminary motion to temporarily block California's gig-worker law from going into effect while they challenge it in court.
A Los Angeles District Court judge presiding over the case said that the interests of the public outweighed any 'irreparable' harm that the new law could wreak on the companies' finances.
"The balance of equities and the public interest weigh in favor of permitting the State to enforce this legislation," Judge Dolly M. Gee ruled.
The judge's ruling means that the new law will be enforced while Uber and Postmates sue the state of California, a setback for the companies that could have serious financial implications.
The two companies have been fighting fiercely to block California's Assembly Bill 5, which was approved by lawmakes in September. AB 5 is aimed at giving wage and benefit protections to people who work as independent contractors. But gig-economy companies have said that the additional labor costs could be a death knell to their businesses.
Uber and Postmates sued the state of California at the end of December, two days before AB 5 was set to go into effect. The two companies argued that the law violated federal and state guarantees of equal protection and due process, by targeting ride-share and delivery companies.
A statement from Uber to Business Insider reiterated the company's commitment to continuing to challenge the case in court.
"We are joining a growing group of companies and individuals suing to ensure that all workers are equally protected under the law and can freely choose the way they want to work," an Uber spokesperson said.
Shona Clarkson, an organizer with Gig Workers Rising, pushed back against Uber's claim that the law harmed worker protections.
"The company is trying every trick in the book to get away with not treating drivers with the dignity and respect they deserve," Clarkson told Business Insider. "Drivers won't stop organizing until they get living wages, benefits and a voice at work."
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