Shares of Uber Technologies (NYSE: UBER) rallied on Tuesday following a favorable court ruling for the ride-sharing specialist. The stock finished the trading session with a 5% gain.
A California appeals court ruled that Uber and other ride-hailing companies can classify their drivers as independent contractors. The decision overturns a lower court ruling that had determined doing so was unconstitutional.
The decision will allow Uber to avoid substantial costs that it otherwise might have been forced to incur. For example, Uber and its rivals will not need to provide certain benefits or pay overtime to its drivers because they will not be considered employees.
Source Fool.com