Uber and Lyft drivers in California win the right to unionize

SACRAMENTO - California Governor Gavin Newsom has signed a bill granting more than 800,000 rideshare drivers the right to unionize and collectively bargain for wages and benefits. 

The new legislation is the result of a compromise between labor unions and tech companies, and it also includes a measure to reduce the companies’ insurance requirements. 

What we know:

The new law is the culmination of a years-long battle over drivers' rights. 

While a 2019 law had initially mandated that Uber and Lyft provide drivers with benefits, that measure was reversed by voters in 2020. 

Last year, the California supreme court ruled that app-based rideshare and delivery services could continue to classify their drivers as independent contractors, who are not entitled to benefits like overtime or paid sick leave. 

This new legislation allows drivers to form a union and bargain collectively while maintaining their independent contractor status.

What they're saying:

Newsom said the new law will give drivers "dignity and a say about their future."

Ramona Prieto, head of public policy for California at Uber, said the two measures "together represent a compromise that lowers costs for riders while creating stronger voices for drivers —demonstrating how industry, labor, and lawmakers can work together to deliver real solutions."

However, not all drivers are satisfied. Rideshare Drivers United, a Los Angeles-based advocacy group, said the law isn't strong enough to secure a fair contract. 

The group's president, Nicole Moore, said that drivers "really need the backing of the state to ensure that not only is a wage proposal actually going to help drivers, but that there is progress in drivers’ pay over the years."

Other drivers expressed hope for the change. 

Ana Barragan, a gig driver from Los Angeles, said, "Drivers have had no way to fight back against the gig companies taking more and more of the passenger fare, or to challenge unfair deactivations that cost us our livelihoods. . . but now, with the right to organize a strong, democratic union, i feel hope."

By the numbers:

The new law is a result of a compromise that also signed into law a measure that cuts insurance requirements for accidents caused by uninsured or underinsured drivers from $1 million to $60,000 per person and $300,000 per accident. 

Lyft CEO David Risher said the new insurance rates are expected to save the company $200 million and could help reduce fares. 

Uber said that nearly one-third of every ride fare in the state goes toward paying for state-mandated insurance.