Uber and Lyft strike California deal allowing drivers to unionize
California lawmakers and ride-hail giants Uber and Lyft agreed on legislation letting app-based drivers form unions. This move could boost driver pay and job protections while cutting ride fares.
Gov. Gavin Newsom and legislative leaders back two bills: Assembly Bill 1340, backed by SEIU California, and Senate Bill 371, sponsored by Uber and Lyft. The laws let drivers organize for better pay, benefits, and protections. In return, California will ease costly insurance mandates that ride-hail companies must cover — a major driver of higher fares and reduced driver pay. 
Newsom called it an “historic agreement between workers and business that only California could deliver.”
Uber’s head of public policy for California, Ramona Prieto, said:
“With Sacramento now aligned on the need to make rideshare more affordable in California, we’re happy to see these two important pieces of legislation moving forward together.”
The deal flips years of opposition after Uber, Lyft, and other gig companies spent $200 million on Prop 22. Prop 22 kept drivers as independent contractors, limiting their rights to unionize and bargain collectively.
Drivers have long complained about low pay and lack of influence over deactivations and earnings. This new deal gives them a stronger voice.
Similar moves are underway in other states. Massachusetts voters backed a unionization path for ride-hail drivers in 2024.
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