SACRAMENTO, Calif. (AP) — More than 800,000 drivers for ride-hailing companies in California will soon be able to join a union and bargain collectively for better wages and benefits under a measure signed Friday by Gov. Gavin Newsom.
Supporters said the new law will open a path for the largest expansion of private sector collective bargaining rights in the state’s history. The legislation is a significant compromise in the yearslong battle between labor unions and tech companies.
California is the second state where Uber and Lyft drivers can unionize as independent contractors. Massachusetts voters passed a ballot referendum in November allowing unionization, while drivers in Illinois and Minnesota are pushing for similar rights.
Newsom announced the signing at an unrelated news conference at University of California, Berkeley. The new law will give drivers “dignity and a say about their future,” he said.
The new law is part of an agreement made in September between Newsom, state lawmakers and the Service Employees International Union, along with rideshare companies Uber and Lyft. In exchange, Newsom also signed a measure supported by Uber and Lyft to significantly cut the companies’ insurance requirements for accidents caused by underinsured drivers.
Lyft CEO David Risher said in September that the new insurance rates are expected to save the company $200 million and could help reduce fares.
Uber and Lyft fares in California are consistently higher than in other parts of the U.S. because of insurance requirements, the companies say. Uber has said that nearly one-third of every ride fare in the state goes toward paying for state-mandated insurance.
Labor unions and tech c