California, October 5, 2025
News Summary
California Governor Gavin Newsom has signed Assembly Bill 1340, allowing over 800,000 rideshare drivers to form unions and negotiate contracts while remaining independent contractors. This landmark legislation requires companies like Uber and Lyft to engage in good faith negotiations with newly formed unions. However, the law does not include other gig workers, such as food delivery drivers. Despite its positive aspects, concerns have been raised about the effectiveness of the law and potential limitations in driver bargaining power.
California Governor Gavin Newsom has signed Assembly Bill 1340 into law, a significant piece of legislation that grants rideshare drivers the right to form unions and negotiate contracts while maintaining their status as independent contractors. This move impacts over 800,000 rideshare drivers in the state, marking one of the most extensive expansions of private sector collective bargaining rights in California’s history.
The new law requires app-based transportation companies such as Lyft and Uber to engage in good faith negotiations with the unions formed by drivers. This legislation comes after years of political and legal battles surrounding the classification of drivers as independent contractors versus employees. Advocates for worker rights view this development as a step forward in the ongoing conversation about gig economy workers’ rights.
However, this law does not extend to other gig workers, including those delivering food for applications like DoorDash. Under AB1340, drivers looking to establish a union must gather signatures from at least 10% of active drivers to initiate a petition. Once 30% of active drivers are signed up, they can seek union certification, leading to an election to determine representation if more than one organization aims to represent the drivers.
Driver Eligibility and Insurance Requirements
The law defines “active” drivers as those who have completed a median number of rides in the last six months. Additionally, the legislation reduces insurance requirements for rideshare companies, lowering coverage for accidents involving underinsured drivers from $1 million to $60,000 per individual and $300,000 per accident.
Responses to the New Law
Rideshare driver Jason Munderloh has expressed optimism regarding the potential benefits this law could provide, such as improved bargaining rights concerning pay and protections. However, he also raises concerns about flaws in AB1340, particularly regarding algorithmic pay changes that may affect drivers’ earnings amid negotiations.
In support of the legislation, Lyft’s director of public policy stated that the law represents a victory for both drivers and riders in California. Nonetheless, some experts and advocates worry this legislation may create a “union-in-name-only” situation, limiting substantial negotiations and accurate protections for drivers.
The advocacy group Rideshare Drivers United has voiced concerns that the collective bargaining law might lack strength, hindering the establishment of fair contracts for drivers. Critics argue that the law does not guarantee worker protections during collective actions like strikes and does not mandate companies to disclose wage data, essential for ensuring equitable treatment.
This legislation comes amidst broader discussions about workers’ rights in the gig economy, underscoring the need for improved safety standards and better compensation for rideshare drivers. Although some lawmakers see this compromise as a significant step towards empowering drivers, it may not fulfill all original aspirations related to their employment status.
Challenges Ahead
The unique structure of gig work poses challenges for drivers in organizing effectively, especially given the absence of designated meeting places. This situation complicates their ability to form and sustain unions, leaving many without crucial support such as fair pay and working conditions.
Conclusion
The passing of AB1340 illustrates a pivotal moment for rideshare drivers in California, granting them rights previously unavailable in the gig economy landscape. As the law faces both support and skepticism from various stakeholders, the effectiveness of the legislation in providing meaningful protections and benefits to drivers will become clearer in the coming months.
FAQ
What is Assembly Bill 1340 in California?
How many rideshare drivers will benefit from the new law?
Do other gig workers benefit from this law?
What does the law require for drivers to form a union?
Key Features of AB1340
| Feature | Description |
|---|---|
| Union Formation | Allows rideshare drivers to form unions and negotiate contracts while being independent contractors. |
| Driver Count | Over 800,000 rideshare drivers in California will benefit from this law. |
| Good Faith Negotiation | Requires app-based transportation companies to negotiate in good faith with drivers’ unions. |
| Driver Eligibility | Active drivers defined as those completing a median number of rides in the past six months. |
| Insurance Requirements | Reduces insurance coverage for underinsured driver accidents from $1 million to $60,000 per individual and $300,000 per accident. |
| Union Petition Requirements | Requires signatures from 10% of active drivers to begin the petition process for union representation. |
Deeper Dive: News & Info About This Topic
- CBS News
- Los Angeles Times
- Associated Press
- Facebook Lookaside
- Governing
- Wikipedia: Gig economy
- Google Search: rideshare drivers California unionization
- Google Scholar: California rideshare union law
- Encyclopedia Britannica: Union organization
- Google News: California rideshare drivers union
Author: STAFF HERE SAN DIEGO WRITER
SAN DIEGO STAFF WRITER The SAN DIEGO STAFF WRITER represents the experienced team at HERESanDiego.com, your go-to source for actionable local news and information in San Diego, San Diego 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 Comic-Con International, San Diego County Fair, and San Diego Pride Festival. Our coverage extends to key organizations like the San Diego Regional Chamber of Commerce and United Way of San Diego County, plus leading businesses in biotechnology, healthcare, and technology that power the local economy such as Qualcomm, Illumina, and Scripps Health. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
