Newsom signs bill allowing California rideshare drivers to form union, negotiate contract

By Amanda Hari

California rideshare drivers will have the ability to form a union and negotiate a contract, while still being classified as independent contractors.

A new law signed by Gov. Gavin Newsom on Friday, Assembly Bill 1340, requires app-based transportation companies, like Lyft and Uber, to negotiate in good faith with a soon-to-be-formed drivers’ union.

Driver Jason Munderloh said he’s optimistic about the bill, but there are some complications. He’s been driving for rideshare services since 2014, when he left his biomedical research job. 

“The pay was pretty good, early on,” Munderloh said. 

At first, he really enjoyed being a driver. 

“The advantages were it’s an exciting job, potentially,” Munderloh said. “You get to see the city. You get to meet a lot of people, and the pay is good, and we have real support and dignity for drivers; it can be a great job. And it was at one point.”

But things changed, especially during the pandemic, when fewer people were using the apps. Usage has picked up, but their pay is still lagging behind what it used to be for many rides. 

Munderloh adds that Prop. 22, which was passed in 2020, has also made things more difficult. It classifies drivers as independent contractors. They don’t get full employee protections, like overtime, paid sick leave, or unemployment insurance.

He hopes AB1340 can help, the bill giving drivers the right to create a first union contract and requiring the companies to negotiate in good faith over issues such as driver deactivation, paid leave and earnings.

“A union potentially gives us the right to organize and bargain collectively, something we haven’t had before,” Munderloh detailed. “It’s every driver for themselves as it is now.”

He admits the legislation signed by the governor isn’t perfect. 

“The bill had some flaws, looking more into it,” Munderloh said. “My organization, Rideshare Drivers United, identified seven places that the bill should be changed to protect, for example, what our wages are during negotiations? What if we enter negotiations and the algorithm suddenly changes and they’re not paying us very well? Nobody has had to deal with algorithmic employment before in a union contract negotiation.”

He explains that they’re in uncharted territory and there is no language in the bill that promises a living wage.

“We are some of the first workers that are being impacted by AI,” Munderloh said. “The algorithm that they have will basically find the person who is willing to take the drive for the cheapest, maybe the most desperate person, undercutting everyone else. We’re really facing AI and Algorithmic discrimination in a way that no one has.”

In a statement, the director of public policy at Lyft, Nick Johnson, was in support of the legislation. 

“This deal is a major victory for both riders and drivers in California,” Johnson said. 

As part of the agreement, Newsom also signed a second bill on Friday, which will drastically reduce insurance coverage requirements for the ride-hailing companies

Despite all of this, Munderloh said there’s more work to be done. The drivers still need to come together to form the union and put the right people in place to negotiate for better working conditions. 

“The future of rideshare really depends on drivers themselves, you know, and we know that the city doesn’t function without us,” Munderloh explained. “We know that we’re essential workers. It’s just a matter of us coming together and being organized and standing up for ourselves.”