California, October 4, 2025
News Summary
California Governor Gavin Newsom has signed AB 1340, allowing Uber and Lyft drivers to negotiate their first union contracts despite being independent contractors. Effective January 1, the law enables certified driver unions to address essential issues like pay and working conditions while protecting drivers from retaliation. While opposed initially, Uber and Lyft have agreed to modified insurance requirements as part of this significant labor shift. Critics highlight barriers that could complicate the pursuit of fair compensation, with negotiations potentially delayed until 2026.
California Governor Gavin Newsom has officially signed legislation that will provide a pathway for Uber and Lyft drivers in California to negotiate their first union contract, despite their classification as independent contractors. This law, designated as AB 1340, was authored by Assemblymembers Buffy Wicks (D-Oakland) and Marc Berman (D-Menlo Park) and is set to take effect on January 1.
Key aspects of AB 1340 allow certified drivers’ unions to negotiate on various critical issues such as pay, working conditions, and benefits. Importantly, the legislation includes safeguards against retaliation for drivers engaging in union activities. This new law marks a significant shift in the ongoing efforts by drivers to secure workplace rights, especially following the passing of Proposition 22 in 2020, which established drivers’ status as independent contractors.
Under federal regulations, independent contractors traditionally do not possess the same rights to collectively bargain as employees do, who are entitled to minimum wage and overtime. AB 1340 mandates app-based companies and certified unions to engage in good faith negotiations on driver-related matters, including pay practices, deactivations, and the provision of paid leave. The Public Employment Relations Board will be responsible for overseeing union elections and ensuring adherence to the resulting bargaining agreements.
Initially, Uber and Lyft were opposed to this new legislation; however, they shifted their stance after reaching an agreement on modified insurance coverage requirements in a separate bill, SB 371. While the law empowers drivers to form unions, critics have raised concerns about persistent barriers that may hinder drivers from achieving fair compensation and better benefits. Union formation mandates labor leaders to obtain signatures from at least 10% of California’s roughly 800,000 ride-hailing drivers and to secure a 30% approval rate for formal recognition as a union.
Additionally, some driver activists have expressed concern that the legislation does not provide a clear right to strike, which would be crucial for enhancing union leverage during negotiations. The development of this law follows a ruling from a California Court of Appeals, which cleared the path for lawmakers to grant collective bargaining rights to drivers, notwithstanding the stipulations of Proposition 22.
Experts remain skeptical about the long-term impact of this legislation, underscoring that Uber and Lyft retain significant control over driver earnings and working conditions. Labor leaders will also face administrative challenges before negotiations can commence, which some experts believe may delay the start of talks until as late as 2026.
Moreover, a comprehensive wage theft lawsuit against Uber and Lyft is underway, aiming to restore back wages and enhance future pay for drivers. Overall, AB 1340 and its associated legislation strive to achieve a balance that lowers costs for riders while amplifying the drivers’ voice within the gig economy.
Notably, with this new model for unionization, California has become the second state in the United States, following Massachusetts, to establish such pathways for app-based drivers.
Key Features of AB 1340
- Effective Date: January 1
- Coverage: Uber and Lyft drivers in California
- Mitigation of Retaliation for Union Activities
- Good Faith Negotiations Required
- Oversight by the Public Employment Relations Board
- Union Formation Requirements: 10% signatures and 30% approval
- Potential Delay in Negotiations Until 2026
- Wage Theft Lawsuit in Progress
FAQ
What is AB 1340?
AB 1340 is legislation signed by California Governor Gavin Newsom that creates a pathway for Uber and Lyft drivers to negotiate a first union contract despite being classified as independent contractors.
When does AB 1340 take effect?
AB 1340 will take effect on January 1.
What rights does AB 1340 provide to drivers’ unions?
The legislation allows certified drivers’ unions to negotiate on behalf of drivers over pay, working conditions, and benefits, while also providing protections against retaliation for union activities.
What must unions do to form under AB 1340?
Labor leaders must secure signatures from at least 10% of the approximately 800,000 ride-hailing drivers and achieve a 30% approval rate to formally recognize the union.
What challenges do drivers face under this new legislation?
Critics argue that while the law empowers drivers to organize, significant barriers remain, including the lack of a guaranteed right to strike, which is crucial for union leverage.
Deeper Dive: News & Info About This Topic
- Politico: Newsom Signs Landmark Deal for Uber, Lyft Driver Unions
- LAist: California Gives Uber, Lyft Drivers Collective Bargaining Rights
- The Guardian: California Ride-Hailing Drivers Union
- New York Times: Uber, Lyft Drivers Unionize in California
- San Francisco Examiner: California Uber, Lyft Drivers Closer to Unionizing Rights
- Wikipedia: Union
- Google Search: Uber and Lyft drivers unionization
- Google Scholar: Uber Lyft drivers union California
- Encyclopedia Britannica: Collective Bargaining
- Google News: California Uber Lyft drivers union
Author: STAFF HERE CORONADO
The Coronado Staff Writer represents the experienced team at HERECoronado.com, your go-to source for actionable local news and information in Coronado, 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 the Coronado Island Film Festival, productions at Lamb’s Players Theatre, community workshops at John D. Spreckels Center, and iconic celebrations at Hotel del Coronado. Our coverage extends to key organizations like the Coronado Chamber of Commerce and Visit Coronado, plus leading businesses in hospitality, dining, and tourism that drive the local economy. As part of the broader HERE network, including HERESanDiego.com, HEREHuntingtonBeach.com, HERELongBeach.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
