·gig economyGavin Newsom reaches deal with Uber and Lyft that’s called the ‘largest expansion of private sector collective bargaining in California history’By Jaimie DingBy Trân NguyễnBy The Associated PressBy Jaimie DingBy Trân NguyễnBy The Associated Press Members rally during a California Gig Workers Union demonstration on Oct.
12, 2022, in San Francisco.Lea Suzuki—San Francisco Chronicle via AP,.
Gavin Newsom and state lawmakers have struck a deal with ride companies Uber and Lyft to allow drivers to join a union and bargain collectively for better wages and benefits.
The agreement includes a bill for collective bargaining backed by the Service Employees International Union along with a measure sponsored by Uber and Lyft that would significantly reduce the companies’ insurance requirements for accidents caused by underinsured drivers, would ultimately reduce costs for passengers.
“Labor and industry sat down together, worked through their differences, and found common ground that will empower hundreds of thousands of drivers while making ride more affordable for millions of Californians,” Newsom said in a press release.
The legislative package represents a significant commise in the yearslong battle between labor unions and companies.
Last July, the California Supreme Court ruled that app-based ride-hailing and dery services Uber and Lyft can continue treating their drivers as independent contractors not entitled to benefits overtime pay, paid sick leave and unemployment insurance.
It upheld a voter-apved ballot measure passed in 2020 that reversed a 2019 law mandating that Uber and Lyft vide drivers with benefits.
The collective bargaining bill would allow the more than 800,000 ride workers in California to join a union while still being classified as independent contractors.
Currently, independent contractors are excluded from the National Labor Relations Act, a federal law that grants workers collective bargaining rights and tections.
David Green, president of SEIU Local 721, called it the “largest expansion of private sector collective bargaining in California history.” With the endorsement from Newsom and legislative leaders, it will ly become law, but it still has to be passed in the Senate and the Assembly in the next two weeks before being signed by the governor to be enacted.
Some of the issues that ride drivers say they face include being “deactivated” from the app without an explanation or fair appeals cess if a passenger complains.
Margarita Penazola, a driver and member of the California Gig Workers Union advocacy group, said this happened to her a few years ago, resulting in three days of lost income.
She believes the ability to unionize would give drivers a voice to address these issues. “It means being able to speak up and tect ourselves and our passengers without fear,” Penazola said.
“We’re the ones out there every day.
We’re the ones that know what’s really happening on the ground, and we should be a part of the decisions that impact our jobs and the people we are trusted to drive safely.” Another driver, Mike Robinson, said he saw his pay go from $700 per week driving 40 hours per week when he first started in 2015, to $500 per week today, before expenses gas and maintenance.
When he was diagnosed with cancer in 2023, he couldn’t work and did not have health insurance, he said. “We need to be able to bargain for fair pay, basic tections and real benefits,” Robinson said.
California would be the second state where drivers would be able to unionize after Massachusetts voters passed a ballot referendum last November allowing drivers to do the same.
Uber and Lyft initially opposed the bill. “We’re encouraged to see these two bills advancing in tandem,” Ramona Prieto, Uber’s head of public policy for California, said in a press release.
“Together, they represent a commise that lowers costs for riders while creating stronger voices for drivers.” Uber and Lyft fares in California are consistently higher than in other parts of the U.S.
because of insurance requirements, according to the companies. Uber has said that nearly one-third of every ride fare in the state goes toward paying for state-mandated insurance.
The insurance bill would reduce the coverage requirement for accidents caused by uninsured or under-insured drivers from $1 million to $60,000 per individual and $300,000 per accident.
Nick Johnson, director of public policy at Lyft, said it will bring “runaway insurance costs under control” and help “maintain the affordability of ride.” Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world.
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