California, October 4, 2025
News Summary
California Governor Gavin Newsom has signed AB 1340, allowing Uber and Lyft drivers to negotiate union contracts starting January 1, 2024. This legislation empowers drivers to engage in collective bargaining for better pay and working conditions, marking a significant milestone for gig economy workers. Despite initial opposition from the ride-hailing companies, changes have led to the law’s passage, which also addresses concerns about protections against retaliation for union activities. However, challenges remain in establishing effective union representation and securing driver benefits.
California Governor Gavin Newsom has signed landmark legislation allowing Uber and Lyft drivers to negotiate for a union contract. This groundbreaking law, known as AB 1340, will take effect on January 1, 2024, and enables drivers in California, classified as independent contractors, to engage in collective bargaining for better pay, working conditions, and benefits. This decision marks a significant step forward for drivers who have fought for improved workplace rights for many years.
The legislation, authored by Assemblymembers Buffy Wicks (D-Oakland) and Marc Berman (D-Menlo Park), will establish a framework allowing certified unions to represent drivers. These unions will be empowered to negotiate on behalf of drivers over essential driver-related concerns, including pay, deactivations, and paid leave, while also ensuring protections against retaliation for union activities. The Public Employment Relations Board is tasked with overseeing union elections and enforcing compliance with bargaining agreements.
Historically, independent contractors have been denied the right to collectively bargain under federal law, whereas employees maintain rights to minimum wage and overtime. The passage of AB 1340 follows the 2020 ballot measure, Proposition 22, which specifically classified drivers as independent contractors. This law now provides a pathway for these gig economy workers to gain representation, even as critics note the hurdles that remain to securing significant changes in their pay and benefits.
While Uber and Lyft initially opposed AB 1340, they shifted their stance after negotiating reduced insurance coverage requirements in a separate bill, SB 371. Despite this development, many experts remain skeptical about the long-term effectiveness of the new law, arguing that it may not significantly alter the control these tech companies have over drivers’ earnings and working conditions.
To form a union under this new legislation, labor leaders must obtain signatures from at least 10% of California’s estimated 800,000 ride-hailing drivers, with a subsequent goal of achieving a 30% approval rate to formally recognize the union. Additionally, driver activists have expressed concerns that the legislation does not guarantee the right to strike, a critical tool for ensuring effective collective bargaining.
AB 1340 comes on the heels of a California Court of Appeals ruling that affirmed lawmakers’ authority to grant collective bargaining rights despite the restrictive elements of Proposition 22. Nevertheless, the path to formal negotiations may still face delays, as labor leaders will have to overcome various administrative challenges, with some predicting that discussions may not commence until 2026.
Furthermore, a comprehensive wage theft lawsuit against Uber and Lyft is currently underway, which aims to recover back wages and elevate future pay standards for drivers. AB 1340, alongside its companion legislation, seeks to strike a balance between reducing costs for ride-hailing passengers while concurrently empowering drivers within the evolving gig economy.
With the enactment of this law, California has become the second state in the U.S., following Massachusetts, to provide such pathways for app-based drivers to unionize, signaling a pivotal shift in labor rights for gig workers.
Key Features of AB 1340
| Feature | Details |
|---|---|
| Legislation Name | AB 1340 |
| Effective Date | January 1, 2024 |
| Authority | Public Employment Relations Board |
| Union Representation Requirement | 10% signature for formation, 30% approval for recognition |
| Originally Opposed By | Uber and Lyft |
| Related Legislation | SB 371 (insurance coverage adjustments) |
| Context | Follows Proposition 22 limitations |
| Projected Start of Negotiations | Possibly 2026 |
Frequently Asked Questions
What is AB 1340?
AB 1340 is a landmark legislation signed by California Governor Gavin Newsom allowing Uber and Lyft drivers to negotiate a first union contract despite being classified as independent contractors.
When will this law take effect?
The law AB 1340 will take effect on January 1, 2024.
What will AB 1340 allow drivers to do?
The legislation allows drivers’ unions, certified by a state board, to negotiate on behalf of drivers over pay, working conditions, and benefits.
What is the role of the Public Employment Relations Board?
The Public Employment Relations Board will oversee union elections and ensure compliance with bargaining agreements.
What are some challenges drivers face under AB 1340?
Drivers face significant barriers in convincing Uber and Lyft to grant better pay and benefits. Additionally, the legislation does not guarantee the right to strike, which is critical for union leverage.
Deeper Dive: News & Info About This Topic
- Politico: Newsom Signs Landmark Deal for Uber, Lyft Driver Unions
- New York Times: Uber and Lyft Drivers Given Right to Unionize in California
- The Guardian: California’s Ride-Hailing Drivers Can Form Unions
- Los Angeles Times: California Lawmakers Propose Union Rights for Ride-Hailing Drivers
- Encyclopedia Britannica: Union (labor)
- Wikipedia: Collective Bargaining
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