Uber and Lyft drivers in California can now unionize
What's the story
California Governor Gavin Newsom has signed a bill granting ride-hailing drivers the right to unionize as independent contractors. The legislation is part of a larger agreement between lawmakers, unions, and ride-hailing companies. It also includes separate bills that reduce insurance requirements for Uber and Lyft. The deal was first announced in August with Newsom calling it a "historic agreement between workers and business that only California could deliver."
Impact
Massachusetts also approved a similar ballot measure
The new law will benefit over 800,000 drivers who will now be able to join a union and negotiate for better pay and benefits. Ramona Prieto, Uber's head of public policy for California, said the two bills "represent a compromise that lowers costs for riders while creating stronger voices for drivers." Massachusetts voters also approved a ballot measure last year giving ride-hailing drivers unionization rights.
Expansion
Major compromise in long-standing battle
Supporters of the new law say it will lead to the biggest expansion of private sector collective bargaining rights in California's history. The legislation is a major compromise in the long-standing battle between the labor unions and tech companies. California is only the second state after Massachusetts where Uber and Lyft drivers can unionize as independent contractors.
Cost reduction
Measure requires gig companies to negotiate in good faith
Lyft CEO David Risher had said last month that the new insurance rates could save the company $200 million and possibly lower fares. Uber has claimed that almost one-third of every ride fare in California goes toward state-mandated insurance costs. The collective bargaining measure now allows rideshare workers in California to unionize while remaining independent contractors, and requires gig companies to negotiate in good faith.