California lawmakers struck a deal with Uber and Lyft that will allow app-based drivers to form unions.
The agreement is a win for gig workers who have long been classified as independent contractors, and thus, ineligible for certain protections that employees receive, like the right to collective bargaining.
Gov. Gavin Newsom, alongside Senate President Pro Tem Mike McGuire and Assembly Speaker Robert Rivas, announced Friday support for two pieces of legislation that form a pathway for app-based drivers to unionize. Assembly bill 1340, is sponsored by SEIU California, and Senate Bill 371 is sponsored by Uber and Lyft.
Newsom called it an “historic agreement between workers and business that only California could deliver.” He said labor representatives and the companies “found common ground that will empower hundreds of thousands of drivers while making rideshare more affordable for millions of Californians.”
The agreement creates a model for drivers to be able to organize for increased pay, job protections, and other benefits.
In exchange, California regulators say they’ll support legislation to reduce expensive insurance coverage mandates that ride-hailing companies have to pay. Uber and Lyft have attributed those insurance payments to higher ride fares in California and lower driver pay.
The deal comes years after Uber, Lyft, and other app-based gig companies spent more than $200 million to convince California voters to pass Prop 22, which classifies gig workers as independent contractors while granting them limited benefits.
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Drivers have long criticized the system for giving companies broad control over pay and deactivations, leaving them limited power to influence earnings or working conditions. Supporters of the new agreement say it could give drivers a stronger voice in pushing back against unfair treatment.
The deal could have ripple effects across other states. In 2024, Massachusetts voters approved a similar initiative to allow ride-hail drivers to form unions and negotiate pay, benefits, and working conditions.
