About 80,000 drivers for rideshare companies like Uber and Lyft in California will be allowed to join a union as part of a legislative deal that also lowers an insurance requirement that drivers carry $1 million in coverage for crashes caused by uninsured or underinsured drivers.California Gov. Gavin Newsom, Senate Pro Tem Mike McGuire, Assembly Speaker Robert Rivas and the leaders of Uber, Lyft and SEIU California announced support for two bills Friday, after nearly a decade of fights over gig worker unionization. Rideshare companies and unions have clashed over how the state’s labor laws should apply to drivers. SEUI California says one in 24 workers in the state is a gig driver. Assembly Bill 1340, known as the Transportation Network Company Drivers Labor Relations Act, allows rideshare drivers to negotiate for better wages, benefits and protections as part of a union. Senate Bill 370 calls for $60,000 in uninsured motorist coverage per individual and $300,000 per accident. The second bill’s backers say the legislation will ultimately reduce the cost of providing rideshare services because the cost of providing the $1 million in coverage had been passed on to customers in fees. While the drivers are required to carry the insurance, companies like Uber and Lyft have been providing it. “Labor and industry sat down together, worked through their differences, and found common ground that will empower hundreds of thousands of drivers while making rideshare more affordable for millions of Californians,” Newsom said in a statement. “It’s proof that California can do big things, tackle tough issues, and improve people’s lives.”Representatives for Lyft and Uber also hailed the deal. “By bringing runaway insurance costs under control, we can help maintain the affordability of rideshare without sacrificing proper protections, allowing people to more easily get to medical appointments, the airport or simply to work every morning. And more rides mean more earnings for drivers to help them achieve their goals,” said Nick Johnson, director of public policy for Lyft. Ramona Prieto, Uber’s head of public policy for California, said she was “encouraged to see these two bills advancing in tandem. Together, they represent a compromise that lowers costs for riders while creating stronger voices for drivers.”Tia Orr, executive director of SEIU California, said, “While Trump tears down unions and hands more power to corporations, California is showing that building a worker-first economy is possible only when we put workers in the driver’s seat.”In 2019, California lawmakers passed a law that mandated rideshare companies provide certain protections for drivers like overtime pay, paid sick leave and unemployment insurance. The next year, voters approved a ballot proposition backed by tech companies that exempted app-based ride-hailing and delivery company gig workers from the law, but added some alternative benefits like a guaranteed minimum wage and health insurance subsidies if the driver averaged at least 25 hours of work a week. Last year, California’s Supreme Court ruled that the companies could continue to treat their drivers as independent contractors instead of employees. -The Associated Press contributed to this report.
About 80,000 drivers for rideshare companies like Uber and Lyft in California will be allowed to join a union as part of a legislative deal that also lowers an insurance requirement that drivers carry $1 million in coverage for crashes caused by uninsured or underinsured drivers.
California Gov. Gavin Newsom, Senate Pro Tem Mike McGuire, Assembly Speaker Robert Rivas and the leaders of Uber, Lyft and SEIU California announced support for two bills Friday, after nearly a decade of fights over gig worker unionization.
Rideshare companies and unions have clashed over how the state’s labor laws should apply to drivers. SEUI California says one in 24 workers in the state is a gig driver.
Assembly Bill 1340, known as the Transportation Network Company Drivers Labor Relations Act, allows rideshare drivers to negotiate for better wages, benefits and protections as part of a union.
Senate Bill 370 calls for $60,000 in uninsured motorist coverage per individual and $300,000 per accident.
The second bill’s backers say the legislation will ultimately reduce the cost of providing rideshare services because the cost of providing the $1 million in coverage had been passed on to customers in fees. While the drivers are required to carry the insurance, companies like Uber and Lyft have been providing it.
“Labor and industry sat down together, worked through their differences, and found common ground that will empower hundreds of thousands of drivers while making rideshare more affordable for millions of Californians,” Newsom said in a statement. “It’s proof that California can do big things, tackle tough issues, and improve people’s lives.”
Representatives for Lyft and Uber also hailed the deal.
“By bringing runaway insurance costs under control, we can help maintain the affordability of rideshare without sacrificing proper protections, allowing people to more easily get to medical appointments, the airport or simply to work every morning. And more rides mean more earnings for drivers to help them achieve their goals,” said Nick Johnson, director of public policy for Lyft.
Ramona Prieto, Uber’s head of public policy for California, said she was “encouraged to see these two bills advancing in tandem. Together, they represent a compromise that lowers costs for riders while creating stronger voices for drivers.”
Tia Orr, executive director of SEIU California, said, “While Trump tears down unions and hands more power to corporations, California is showing that building a worker-first economy is possible only when we put workers in the driver’s seat.”
In 2019, California lawmakers passed a law that mandated rideshare companies provide certain protections for drivers like overtime pay, paid sick leave and unemployment insurance. The next year, voters approved a ballot proposition backed by tech companies that exempted app-based ride-hailing and delivery company gig workers from the law, but added some alternative benefits like a guaranteed minimum wage and health insurance subsidies if the driver averaged at least 25 hours of work a week.
Last year, California’s Supreme Court ruled that the companies could continue to treat their drivers as independent contractors instead of employees.
-The Associated Press contributed to this report.
Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.