California, October 5, 2025
News Summary
California Governor Gavin Newsom has signed Assembly Bill 1340 into law, allowing rideshare drivers to unionize while retaining independent contractor status. This landmark legislation impacts over 800,000 drivers statewide, mandating app-based transportation companies to engage in good faith negotiations with newly formed unions. Although this law facilitates collective bargaining for rideshare drivers, it excludes other gig workers like food delivery drivers, and concerns about the adequacy of worker protections during negotiations persist.
California Passes Landmark Bill Allowing Rideshare Drivers to Unionize as Independent Contractors
California Governor Gavin Newsom has signed Assembly Bill 1340 into law, a significant piece of legislation that allows rideshare drivers to form unions and negotiate contracts while retaining their status as independent contractors. This new law is expected to benefit over 800,000 rideshare drivers in the state and is being hailed as one of the largest expansions of private sector collective bargaining rights in California’s history.
The law requires app-based transportation companies, such as Lyft and Uber, to negotiate in good faith with the newly-formed drivers’ unions. This development marks a notable compromise between labor unions, specifically the Service Employees International Union (SEIU), and gig economy companies, following a series of political and legal disputes regarding the classification of drivers.
While the legislation provides a pathway for drivers to collectively bargain, it is important to note that it does not extend these rights to other gig workers, such as food delivery drivers working for apps like DoorDash. To form a union, drivers need to gather signatures from at least 10% of active drivers to petition for representation. If 30% of active drivers are signed up, they can request union certification, leading to an election if multiple organizations seek to represent the drivers.
The definition of “active” drivers includes those who completed a median number of rides during the previous six-month period, ensuring that the unionization process focuses on those actively engaged in driving. Additionally, the law reduces insurance requirements for rideshare companies, decreasing coverage for accidents involving underinsured drivers from $1 million to $60,000 per individual and $300,000 per accident.
Impact on Drivers and Industry Response
Rideshare driver Jason Munderloh expressed optimism about the law, noting the potential benefits of collective bargaining rights, including negotiating pay and protections for drivers. However, challenges remain, particularly concerning algorithmic pay changes, which could affect drivers’ earnings during negotiations.
Lyft’s director of public policy, Nick Johnson, called the legislation a victory for both riders and drivers in California. In contrast, concerns have been raised by experts and advocates who fear that the legislation could result in a “union-in-name-only,” limiting meaningful negotiations and protections for drivers. Driver advocacy group Rideshare Drivers United has indicated that the collective bargaining law may not be stringent enough to ensure fair contracts for drivers.
Critics of AB1340 argue that the law does not guarantee adequate worker protections during collective actions, such as strikes, and does not require companies to disclose wage data. This legislation highlights a broader conversation about workers’ rights within the gig economy, emphasizing the necessity for safety and better pay for rideshare drivers. Some lawmakers view this compromise as a step forward in empowering drivers, despite acknowledging that it does not fully achieve all original goals surrounding their employment status.
Drivers face challenges organizing due to their non-traditional work environments, which lack designated meeting spots for collective action. As a result, the effectiveness of unionization may be hampered by the fragmented nature of their work.
Conclusion
The passage of Assembly Bill 1340 represents a notable milestone in California’s labor landscape, as rideshare drivers gain new rights to organize and advocate for fair terms within the growing gig economy. As the implications of this legislation unfold, both advocates and critics will be closely monitoring its impact on drivers and the industry as a whole.
FAQ
What does Assembly Bill 1340 allow rideshare drivers to do?
Assembly Bill 1340 allows rideshare drivers to form unions and negotiate contracts while retaining their status as independent contractors.
How many rideshare drivers in California will benefit from this law?
Over 800,000 rideshare drivers in California will benefit from the new unionization rights.
What is required for rideshare drivers to form a union?
Drivers need signatures from at least 10% of active drivers to petition for union representation, and once 30% of active drivers are signed up, they can petition for union certification.
Does this legislation apply to all gig workers?
No, the law does not extend to other gig workers, such as food delivery drivers working for apps like DoorDash.
What are some concerns regarding the legislation?
Some experts and advocates worry that the legislation could lead to a “union-in-name-only,” limiting meaningful negotiations and protections for drivers. Critics also argue that the law does not guarantee worker protections during collective actions.
Key Features Overview
| Feature | Description |
|---|---|
| Unionization Rights | Allows rideshare drivers to form unions and negotiate contracts. |
| Active Driver Definition | Drivers who completed a median number of rides in the past six months. |
| Signature Requirement | 10% of active drivers needed to petition for union representation. |
| Certification Process | 30% of active drivers must sign up to petition for union certification. |
| Insurance Requirements | Reduced insurance coverage for underinsured drivers from $1 million to $60,000 per individual. |
| Exclusions | The law does not apply to food delivery drivers working for apps like DoorDash. |
Deeper Dive: News & Info About This Topic
- CBS News: California Signs Rideshare Union Bill
- Los Angeles Times: New Law for Rideshare Drivers
- AP News: Rideshare Union Rights in California
- Politico: California’s Rideshare Union Legislation
- Governing: California’s Union Policy for Rideshare
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