It all began in May.

That's when California sued the two companies for not complying with a state law that aims to reclassify at based workers as employees who are entitled to benefits such as unemployment insurance and the minimum wage.

A California judge in August ordered the companies to reclassify their drivers as employees.

Uber and Lyft filed an appeal threatening to leave the state.

The appeals court judges ruled ubers and lifts misclassification irreparably harmed drivers because they missed out on employee benefits as independent contractors.

Lyft and Uber said they were considering all legal options, including an appeal.

The court ruling will not go into effect before a November 3rd company sponsored ballot initiative that will let voters decide the future status of gig workers.

Still, the decision narrows the company's options should their ballot failed.