California, October 5, 2025
News Summary
California Governor Gavin Newsom has signed Assembly Bill 1340, allowing rideshare drivers to form unions and negotiate contracts while remaining independent contractors. This law marks a significant development for over 800,000 drivers in the state, compelling companies like Uber and Lyft to engage in good faith negotiations with driver unions. While this provides potential benefits for drivers, it raises concerns about insufficient protections and the threat of ‘union-in-name-only.’ The law highlights ongoing debates about workers’ rights in the gig economy.
California Governor Gavin Newsom has signed Assembly Bill 1340 into law, a groundbreaking piece of legislation that allows rideshare drivers to form unions and negotiate contracts while still keeping their status as independent contractors. This law is significant for the over 800,000 rideshare drivers in the state, marking one of the largest expansions of private sector collective bargaining rights in California’s history.
The new law mandates that app-based transportation companies, including major platforms like Lyft and Uber, engage in good faith negotiations with the newly formed drivers’ unions. This development is the result of a compromise between labor unions, notably the Service Employees International Union (SEIU), and gig economy companies, following years of intense political and legal battles regarding drivers’ classification.
While this landmark bill specifically addresses rideshare drivers, it does not extend its protections or rights to other gig workers, such as those delivering food for apps like DoorDash. The legislation sets a clear path for drivers to unionize; they need signatures from at least 10% of active drivers to start the union representation process. Once 30% of active drivers express their support, they can petition for union certification which may lead to an election if multiple organizations aim to represent them.
The definition of “active” drivers includes those who completed a median number of rides during the preceding six months, ensuring that the union is representative of those who are consistently engaged in the ridesharing business. However, the law also reduces the insurance requirements for rideshare companies. It lowers coverage for accidents involving underinsured drivers from $1 million to $60,000 per individual and $300,000 per accident.
Rideshare drivers have expressed a mix of optimism and concern regarding AB1340. Many recognize the potential for collective bargaining rights that could lead to improved pay and protections but point out existing challenges and flaws in the law. Some drivers signal that issues such as algorithmic pay changes could undermine earnings during negotiations with companies.
Support for the legislation has been voiced by representatives from the rideshare companies themselves, who label the law a victory for both drivers and riders in California. However, experts and advocacy groups have raised red flags over the possibility that the new laws could result in a “union-in-name-only,” which might limit the scope and efficacy of drivers’ negotiations and protections.
Concerns have also been raised by the driver advocacy group Rideshare Drivers United, which argues that the collective bargaining law lacks the strength necessary to secure fair contracts for drivers. Critics also maintain that it does not guarantee adequate worker protections during collective actions, such as strikes, nor does it mandate companies to disclose essential wage data.
This legislative move is part of a broader discussion surrounding workers’ rights in the gig economy, drawing attention to issues such as safety and fair compensation for rideshare drivers. While some lawmakers view the compromise as a positive step towards empowering drivers, they acknowledge that it doesn’t fully address all initial concerns related to their employment status and worker protections.
Organizing as a labor force poses its own set of challenges due to the nature of rideshare driving, which lacks established meeting places and conventional work environments. As the law unfolds, its impact on driver negotiations and welfare remains to be seen.
FAQ
What is Assembly Bill 1340?
Assembly Bill 1340 is a law signed by California Governor Gavin Newsom that allows rideshare drivers to form unions and negotiate contracts while retaining their status as independent contractors.
Who will benefit from the new unionization rights?
Over 800,000 rideshare drivers in California will benefit from the new unionization rights.
What is required for rideshare drivers to form a union?
Drivers need signatures from at least 10% of active drivers to petition for union representation. Once 30% of active drivers sign up, they can petition for union certification.
Does the law apply to other gig workers?
No, the law does not extend its protections or rights to other gig workers, such as food delivery drivers working for apps like DoorDash.
What are some concerns regarding the law?
Some experts and advocates worry that the legislation could lead to a “union-in-name-only”, limiting meaningful negotiations and protections for drivers. Critics also argue that it does not guarantee worker protections during collective actions and does not require companies to disclose wage data.
Key Features of Assembly Bill 1340
| Feature | Details |
|---|---|
| Union Formation | Drivers need at least 10% of active drivers for a petition and 30% for union certification. |
| Applicability | Benefits over 800,000 rideshare drivers, excludes food delivery drivers. |
| Insurance Reduction | Reduces underinsured driver coverage from $1 million to $60,000 per individual and $300,000 per accident. |
| Good Faith Negotiations | Requires companies to negotiate in good faith with driver unions. |
| Concerns | Potential for “union-in-name-only”, no required wage data disclosure. |
Deeper Dive: News & Info About This Topic
- CBS News
- Wikipedia: California
- Los Angeles Times
- Google Search: California rideshare drivers union
- Associated Press
- Encyclopedia Britannica: Gig Economy
- LAist
- Google News: California AB1340 rideshare drivers
- Politico
Author: STAFF HERE BEVERLY HILLS WRITER
The Beverly Hills Staff Writer represents the experienced team at HEREBeverlyHills.com, your go-to source for actionable local news and information in Beverly Hills, Los Angeles County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Rodeo Drive Concours d'Elegance, the Beverly Hills artSHOW, Concerts on Canon, and holiday celebrations throughout the city. Our coverage extends to key organizations like the Beverly Hills Chamber of Commerce and Visit Beverly Hills, plus leading businesses in luxury fashion, hospitality, and entertainment that drive the local economy. As part of the broader HERE network, including HERELosAngeles.com, HERESantaAna.com, HEREHuntingtonBeach.com, and HERECostaMesa.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
