Ride-hailing companies Uber and Lyft have abandoned their resistance to a legislative proposal in California granting drivers union rights.
Uber, Lyft Agree to Support California Drivers' Unionization
In a significant move for the rideshare industry, Uber Technologies Inc. and Lyft Inc. have agreed to support a state-supervised way for California drivers to unionize. This decision comes as part of a new legislative package aimed at making rideshare more affordable in the state.
The legislative deal includes the passing of two bills: AB 1340, sponsored by the Service Employees International Union (SEIU California), and SB 371, which is backed by the rideshare industry. The bargaining bill, similar to a ballot measure Massachusetts voters passed in November, represents the largest expansion of private sector collective bargaining in California history, giving approximately 800,000 drivers a means to organize and bargain.
Gov. Gavin Newsom (D) supports the pact, which includes the passage of AB 1340 and SB 371. Ramona Prieto, Uber's head of public policy for California, stated that with Sacramento now aligned on the need to make rideshare more affordable in California, they are happy to see the two legislations moving forward. Nick Johnson, Lyft's director of public policy, expressed that this deal is a major victory for both riders and drivers in California.
One of the key aspects of the new legislative package is the reduction in insurance requirements. SB 371 lowers the amount of uninsured motorist insurance the state requires the companies to carry for drivers. Uber and Lyft argue that this reduction will improve ride affordability.
However, it's important to note that AB 1340 won't change gig drivers' legal status as independent contractors in California. This means that while drivers can unionize and collectively bargain, they will not receive traditional employee benefits such as unemployment insurance or workers' compensation.
Uber has prioritized insurance reform at the state level and has filed three lawsuits this year accusing lawyers and medical providers of making fraudulent insurance claims, costing the company millions in legal fees. The company has made it clear that affordability is a key concern for them.
The agreement between Uber, Lyft, and the state of California creates a model for drivers to organize and negotiate a labor contract outside the federally supervised union rights provided by the National Labor Relations Act. This model could potentially be replicated in other states, where fights persist over ride-hail drivers' classification, pay, job protections, and benefits.
In conclusion, the agreement between Uber, Lyft, and California marks a significant step towards improving the working conditions and potential earnings for rideshare drivers in the state. While the details of the unionization process are still being worked out, the agreement represents a promising step forward in addressing the issues faced by gig economy workers.
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