In a deal with Uber and Lyft, Gov. Gavin Newsom and several state lawmakers are backing legislation that would allow rideshare drivers to unionize while lowering the insurance threshold for drivers.
The agreement, if approved, would allow hundreds of thousands of rideshare drivers to form unions and bargain collectively while still being classified as gig workers, according to supporters ahead of a Friday vote on the legislation in Sacramento.
The union-backed Assembly Bill 1340, sponsored by Assemblymembers Buffy Wicks, D-Oakland, and Marc Berman, D-Menlo Park, would establish the framework for more than 800,000 rideshare drivers statewide to unionize and negotiate for higher wages, health benefits and workplace rights.
Tia Orr, executive director of labor union SEIU California, said that building a “worker-first economy is possible only when we put workers in the drivers’ seat.”
Lyft- and Uber-backed Senate Bill 371, authored by State Sen. Christopher Cabaldon, D-Santa Rosa, would reduce the cost of rideshare services by reducing an insurance requirement that drivers carry $1 million in coverage for accidents caused by other drivers who are uninsured or underinsured. The agreement lowers that to $60,000 in uninsured motorist coverage per individual and $300,000 per accident.
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Representatives of both San Francisco-based rideshare companies hailed the compromise as a way forward for the industry.
“This deal is a major victory for both riders and drivers in California,” said Nick Johnson, director of public policy at Lyft, in a statement. “By bringing runaway insurance costs under control, we can help maintain the affordability of rideshare without sacrificing proper protections, allowing people to more easily get to medical appointments, the airport or simply to work every morning. And more rides mean more earnings for drivers to help them achieve their goals.”
Ramona Prieto, Uber’s head of public policy for California, said in a statement that Uber supports the compromise as well.
“Sacramento has come together around the need to make rideshare more affordable in California, and we’re encouraged to see these two bills move in tandem,” Prieto said.
“SB 371 provides much-needed reform that will lower fares for riders and bring more opportunity for drivers,” Prieto said. “At the same time, AB 1340 will give drivers the option to organize around pay and benefits without sacrificing the independence they value most.”
With legislative, union and industry support for the two pieces of legislation, key leaders are now expected to move a proposal forward that includes elements of each of the bills.
Senate President Pro Tempore Mike McGuire, a Democrat who represents the Pacific coast north of San Francisco to the Oregon border, Assembly Speaker Robert Rivas, a democrat from the Central Coast, supported the deal.