California lawmakers have reached a groundbreaking agreement with Uber and Lyft that will allow app-based drivers to unionize while also addressing the cost of ride fares.
Governor Gavin Newsom, Senate President Pro Tem Mike McGuire, and Assembly Speaker Robert Rivas announced Friday that they support two bills designed to give drivers collective bargaining rights. Assembly Bill 1340, backed by SEIU California, and Senate Bill 371, supported by Uber and Lyft, create a framework for drivers to organize around better pay, job protections, and benefits.
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Newsom called the deal an “historic agreement between workers and business that only California could deliver,” noting that it empowers drivers while also lowering ride costs for millions of residents.
In return, regulators plan to ease costly insurance mandates on ride-hailing companies, a move Uber and Lyft say has driven up fares and reduced driver earnings. “With Sacramento now aligned on the need to make rideshare more affordable in California, we’re happy to see these two important pieces of legislation moving forward together,” said Ramona Prieto, Uber’s head of public policy for California.
The deal follows years of tension over gig worker rights. In 2020, companies spent more than $200 million to pass Proposition 22, which classified drivers as independent contractors with limited benefits. Critics argue the law gave companies too much control while leaving drivers with little bargaining power.
For workers like Margarita Peñalosa, a Los Angeles driver and member of the California Gig Workers Union, the agreement represents hope for change. “Some drivers fear getting deactivated and losing their jobs, so we often feel pressured to stay silent instead of demanding fair treatment,” she said. “AB 1340 would give gig drivers a real voice and the protections we need to be treated with respect and dignity.”
The California model could influence other states. In 2024, Massachusetts voters passed a similar initiative granting ride-hail drivers the right to unionize and negotiate for better pay and conditions.
