California Uber and Lyft Drivers Secure Route to Unionization

California lawmakers have reached a deal with Uber and Lyft, allowing app-based drivers to form unions, which could lead to lower ride-hailing fares.

This agreement marks a notable win for gig workers, who have historically been categorized as independent contractors and therefore lack access to certain employee benefits like collective bargaining rights.

On Friday, Governor Gavin Newsom, Senate President Pro Tem Mike McGuire, and Assembly Speaker Robert Rivas backed two legislative measures that will facilitate the unionization of app-based drivers. Assembly Bill 1340 is supported by SEIU California, while Senate Bill 371 receives backing from Uber and Lyft.

Newsom praised the deal as an “historic agreement between workers and businesses that only California could broker.” He remarked that labor representatives and companies “found common ground that empowers countless drivers while making rideshare more accessible for millions of Californians.”

The framework allows drivers to advocate for improved wages, job security, and enhanced benefits.

In exchange, California regulators have agreed to back legislation that aims to lessen the expensive insurance requirements imposed on ride-hailing firms. Uber and Lyft have attributed these insurance costs to higher ride fares in California and reduced earnings for drivers.

“With Sacramento united on the urgency of making rideshare more affordable in California, we’re pleased to see these two vital pieces of legislation advance together,” said Ramona Prieto, Uber’s head of public policy for California.

This agreement comes after years in which Uber, Lyft, and other app-based gig companies spent over $200 million persuading California voters to support Prop 22, which classified gig workers as independent contractors with limited benefits.

Drivers have often criticized the current system for giving companies substantial control over pay and deactivations, limiting their ability to influence earnings or working conditions. Proponents of the new agreement believe it could empower drivers to better confront unfair treatment.

The repercussions of this agreement may reach other states. In 2024, voters in Massachusetts approved a similar measure allowing ride-hail drivers to unionize and negotiate pay, benefits, and working conditions.

This article was updated with a statement from Uber.