Uber Braces for Fight Over Big Change to Gig-Economy Work Rules (1)

Uber Technologies Inc. has generated billions of dollars from the labor of its drivers without the expense of treating them as employees. California is poised to disrupt that business model, and the ride-hailing behemoth is gearing up for a legal fight.

Lawmakers in the state want to reclassify workers treated as independent contractors, which may dramatically boost costs for Uber and other companies built around the gig economy. Under Assembly Bill 5, which has cleared both houses of the California Legislature, many workers would be entitled to a minimum wage, mileage reimbursement and workers compensation.

Gavin Newsom

Photographer: David Paul Morris/Bloomberg

Proponents say the bill, ...