California lawmakers reach deal with Uber, Lyft that would allow drivers
to unionize
[August 30, 2025] By
JAIMIE DING and TRÂN NGUYỄN
SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom and state
lawmakers have struck a deal with rideshare companies Uber and Lyft to
allow drivers to join a union and bargain collectively for better wages
and benefits.
The agreement includes a bill for collective bargaining backed by the
Service Employees International Union along with a measure sponsored by
Uber and Lyft that would significantly reduce the companies' insurance
requirements for accidents caused by underinsured drivers, would
ultimately reduce costs for passengers.
“Labor and industry sat down together, worked through their differences,
and found common ground that will empower hundreds of thousands of
drivers while making rideshare more affordable for millions of
Californians," Newsom said in a press release.
The legislative package represents a significant compromise in the
yearslong battle between labor unions and tech companies.
Last July, the California Supreme Court ruled that app-based
ride-hailing and delivery services like Uber and Lyft can continue
treating their drivers as independent contractors not entitled to
benefits like overtime pay, paid sick leave and unemployment insurance.
It upheld a voter-approved ballot measure passed in 2020 that reversed a
2019 law mandating that Uber and Lyft provide drivers with benefits.
The collective bargaining bill would allow the more than 800,000
rideshare workers in California to join a union while still being
classified as independent contractors. Currently, independent
contracters are excluded from the National Labor Relations Act, a
federal law that grants workers collective bargaining rights and
protections.
David Green, president of SEIU Local 721, called it the “largest
expansion of private sector collective bargaining in California
history.”
With the endorsement from Newsom and legislative leaders, it will likely
become law, but it still has to be passed in the Senate and the Assembly
in the next two weeks before being signed by the governor to be enacted.
Some of the issues that rideshare drivers say they face include being
“deactivated” from the app without an explanation or fair appeals
process if a passenger complains.
Margarita Penazola, a driver and member of the California Gig Workers
Union advocacy group, said this happened to her a few years ago,
resulting in three days of lost income. She believes the ability to
unionize would give drivers a voice to address these issues.
[to top of second column] |
Members rally during a California Gig Workers Union demonstration on
Oct. 12, 2022, in San Francisco. (Lea Suzuki/San Francisco Chronicle
via AP, File)
 “It means being able to speak up and
protect ourselves and our passengers without fear,” Penazola said.
“We’re the ones out there every day. We’re the ones that know what’s
really happening on the ground, and we should be a part of the
decisions that impact our jobs and the people we are trusted to
drive safely.”
Another driver, Mike Robinson, said he saw his pay go from $700 per
week driving 40 hours per week when he first started in 2015, to
$500 per week today, before expenses like gas and maintenance. When
he was diagnosed with cancer in 2023, he couldn't work and did not
have health insurance, he said.
“We need to be able to bargain for fair pay, basic protections and
real benefits,” Robinson said.
California would be the second state where drivers would be able to
unionize after Massachusetts voters passed a ballot referendum last
November allowing drivers to do the same. Uber and Lyft initially
opposed the bill.
“We’re encouraged to see these two bills advancing in tandem,”
Ramona Prieto, Uber’s head of public policy for California, said in
a press release. “Together, they represent a compromise that lowers
costs for riders while creating stronger voices for drivers.”
Uber and Lyft fares in California are consistently higher than in
other parts of the U.S. because of insurance requirements, according
to the companies. Uber has said that nearly one-third of every ride
fare in the state goes toward paying for state-mandated insurance.
The insurance bill would reduce the coverage requirement for
accidents caused by uninsured or under-insured drivers from $1
million to $60,000 per individual and $300,000 per accident.
Nick Johnson, director of public policy at Lyft, said it will bring
“runaway insurance costs under control” and help “maintain the
affordability of rideshare.”
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