BOSTON, May 6 (Reuters) - The top Massachusetts court on

Monday is set to consider whether the state's voters will get to

decide two ballot proposals in November that would redefine the

relationship between app-based companies like Uber Technologies ( UBER )

and Lyft ( LYFT ) and their drivers - one backed by

industry and the other by labor.

The Massachusetts Supreme Judicial Court first will hear

arguments in a labor-backed challenge to a ballot proposal by an

industry-supported group that would ask voters to declare that

the drivers for the companies are not employees but rather

independent contractors entitled to some new benefits.

The court then will hear a challenge by a conservative think

tank to a proposed ballot measure supported by the Service

Employees International Union's Local 32BJ that would ask voters

to allow Uber ( UBER ) and Lyft ( LYFT ) drivers to unionize.

Using contractors can cost companies as much as 30% less

than using employees, according to various studies. A ballot

victory for the companies in a state with some of the most

employee-friendly laws could embolden them to pursue similar

measures in other states, according to labor activists.

Uber ( UBER ) and Lyft ( LYFT ), along with app-based delivery services

Instacart and DoorDash ( DASH ), have spent millions of dollars

to support the ballot proposal that would cement the status of

their drivers as contractors under state law.

The proposal by Flexibility and Benefits for Massachusetts

Drivers, a ballot measure committee whose contributors include

the four companies, also would establish an earnings floor equal

to 120% of the state's minimum wage for app-based drivers, or

$18 an hour in 2023 before tips.

Drivers would receive healthcare stipends, occupational

accident insurance and paid sick time under the proposal.

The same court in 2022 blocked a similar industry-backed

ballot measure, finding that it contained an unrelated proposal

that ran afoul of a state constitutional requirement that ballot

questions be limited to related subjects.

To hedge its bets, Flexibility and Benefits for

Massachusetts Drivers is gathering signatures for five different

versions of the current ballot question, only one of which would

be put before voters on Nov. 5.

Uber ( UBER ) and Lyft ( LYFT ) also are preparing to face a May 13 trial in a

civil lawsuit filed in 2020 by the state. The state's Democratic

attorney general, Andrea Joy Campbell, is asking a judge to

conclude that the two companies have been unlawfully classifying

their drivers as contractors, not employees.

Should Uber ( UBER ) and Lyft ( LYFT ) lose that trial and fail to win over

voters at the ballot box, the companies have said they could be

forced to cease operations in Massachusetts due to the

economics.

If the industry-backed ballot measure passes but the state

wins in the trial, Campbell's office has said the new law would

control for the future but that Uber ( UBER ) and Lyft ( LYFT ) could be subject

to penalties for the past misclassification of their drivers.