California lawmakers have struck a groundbreaking deal with Uber and Lyft that creates a pathway for app-based drivers to unionize, marking a historic victory for hundreds of thousands of gig workers who have long been classified as independent contractors without collective bargaining rights. Governor Gavin Newsom called it an “historic agreement between workers and business that only California could deliver,” emphasizing how labor representatives and ride-hail companies found common ground that benefits both drivers and passengers. The agreement addresses years of criticism from drivers who felt powerless against company policies regarding pay, deactivations, and working conditions, often staying silent out of fear of losing their livelihoods. Assembly Bill 1340, sponsored by SEIU California, and Senate Bill 371, backed by Uber and Lyft, work together to create a model for drivers to organize for increased pay, job protections, and other benefits.
In exchange for supporting unionization rights, California regulators will back legislation to reduce expensive insurance coverage mandates that ride-hailing companies currently pay, which they say contributes to higher fares and lower driver pay. The deal comes years after these companies spent over $200 million convincing voters to pass Proposition 22, which maintained drivers’ independent contractor status while providing limited benefits. Driver Margarita Peñalosa from Los Angeles captured the significance perfectly, explaining that many immigrant drivers like herself have felt pressured to stay silent about unfair treatment rather than risk deactivation. This California breakthrough could create ripple effects nationwide, as Massachusetts voters already approved a similar initiative, suggesting that the future of gig work may finally include the worker protections and voices that have been missing for too long.