Gov. Gavin Newsom signed companion bills on Friday, Oct. 3, allowing hundreds of thousands of rideshare drivers to unionize while lowering their insurance threshold.
The union-backed Assembly Bill 1340, sponsored by Assemblymembers Buffy Wicks, D-Oakland, and Marc Berman, D-Menlo Park, establishes the framework for more than 800,000 rideshare drivers to unionize and negotiate for higher wages, health benefits and workplace rights.
Lyft- and Uber-backed Senate Bill 371, authored by State Sen. Christopher Cabaldon, D-Santa Rosa, lowers the cost of rideshare services by reducing the insurance requirement that drivers carry $1 million in coverage for accidents caused by other drivers who are uninsured or underinsured. The agreement lowers that threshold to $60,000 in uninsured motorist coverage per individual and $300,000 per accident.
“Donald Trump is holding the government hostage and stripping away worker protections,” Newsom said in a statement Friday. “In California, we’re doing the opposite: proving government can deliver — giving drivers the power to unionize while we continue our work to lower costs for families.
“That’s the difference between chaos and competence,” the governor said.
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Taken together, the two bills represent a compromise that “lowers costs for riders while creating stronger voices for drivers — demonstrating how industry, labor, and lawmakers can work together to deliver real solutions,” said Ramona Prieto, Uber’s head of public policy for California, in a statement late Friday.
An Uber spokesman said that SB 371 takes aim at one of the biggest hidden costs in California rideshare: excessive government-mandated insurance requirements.
“It will help make rides more affordable for riders while increasing earning opportunities for drivers,” he said. “Insurance currently makes up 32% of every fare statewide and nearly 45% in Los Angeles County, far higher than in most other states.”
A Lyft representative was not immediately available for comment. However, the two San Francisco-based rideshare companies hailed the legislation jointly when lawmakers and the companies came together last month on a compromise as a way forward for the industry.
