July 25 (Reuters) - California's top state court on

Thursday upheld a measure approved by voters allowing app-based

services such as Uber ( UBER ) and Lyft ( LYFT ) to consider

drivers in the most populous U.S. state as independent

contractors rather than as employees entitled to greater

benefits.

The ruling by the California Supreme Court is a major

victory for the ride-hailing industry, which has said that many

companies would end or limit service in the state if they were

forced to treat thousands of drivers as their employees.

The court dismissed a lawsuit by the Service Employees

International Union (SEIU) and four drivers who say the 2020

ballot measure known as Proposition 22, which preserves drivers'

contractor status while granting them some benefits, was

unconstitutional.