California Bill Would Allow Uber, Lyft Drivers to Bargain Collectively

Updated 2:23 p.m. Tuesday

California lawmakers are introducing a bill that would allow drivers for ride-hailing apps to bargain collectively over pay and working conditions, even as they remain classified as independent contractors for companies such as Uber and Lyft.

Under the measure, announced Tuesday at a rally with dozens of drivers near the state Capitol, unions that are certified by the state would be able to negotiate with app-based transportation companies on behalf of drivers to resolve disputes and improve working conditions. The California Labor and Workforce Development Agency would enforce the provisions, though details on the process have not yet been worked out, according to a draft of the bill reviewed by KQED.

Independent contractors are not entitled to employee benefits such as minimum wage and overtime. They are also excluded from the National Labor Relations Act, a federal law that grants most private-sector employees the right to collectively bargain.

The proposed legislation, AB 1340, would not cover delivery drivers.

Assemblymembers Buffy Wicks (D-Oakland) and Marc Berman (D-Menlo Park), who are among several Democratic co-authors of the bill, spoke at Tuesday’s rally.

“We stand for the right of every worker to truly have a voice,” Wicks told the crowd of people holding signs that read “Gig Drivers Union Now.” “We’re here today to talk about respecting the voices of our rideshare drivers and offering you the choice to build power in your union. To build power for better wages, to build power for better working conditions, to build power for financial stability in your homes.”

The Service Employees International Union, which supports AB 1340, backed a similar initiative in Massachusetts that voters approved last fall.

In California, Uber, Lyft and other gig companies spent more than $200 million to back Proposition 22, a 2020 ballot initiative that exempted them from having to classify their drivers as employees. Studies show employers often save money by hiring independent contractors, as they generally avoid paying for payroll taxes and employee benefits.

“Drivers overwhelmingly voted for and continue to support Prop. 22 because it is their preferred way to structure benefits and protections,” a Lyft spokesperson said in a statement. “And for years, we’ve been building upon this framework to roll out new products and features designed to improve the driver experience.”

As part of Proposition 22, the gig companies promised that drivers would receive at least 120% of the local minimum wage while giving a ride or doing a delivery, a health care stipend of up to $426 for those that qualified, and accident insurance.

An Uber spokesperson said AB 1340, if implemented, would end up increasing the price of rides and suggested that most drivers’ voices may be left out of a union process because only a small proportion work a significant number of hours.

They pointed to a report (PDF) by the Berkeley Research Group, a consulting firm, that found only 7% of drivers for app-based ride and delivery platforms worked more than 20 hours per week. The research was commissioned by Protect App-Based Drivers & Services, a group that counts Uber and Lyft among its members.

“Californians are already feeling the squeeze — and this proposal would drive up rideshare costs even more while threatening the flexible jobs thousands depend on,” the Uber spokesperson said. “Drivers have been clear: they want to stay independent and keep the freedom to choose when and how they work, with access to meaningful benefits.”

However, at the Sacramento rally, several drivers said their payment for rides has dropped as Uber and Lyft keep a greater share of what customers pay. A report by the UC Berkeley Labor Center last year found that ride-hail drivers in the San Francisco Bay and four other metro areas made less than minimum wage after taking into account expenses and wait times.

Nick Calabar Jr. of Stockton said that when he started driving for Uber and Lyft 16 years ago, the pay was decent, but now it’s a struggle to survive. During a ride last week that cost the customer $60, Lyft only paid him $14, he said.

“How is that fair? I do all the work, pay for the cost of my car payment each month, cost of charging my vehicle, and not to mention taking all the risks,” Calabar said. “Like thousands of rideshare drivers, working for Uber or Lyft isn’t just a side gig, it’s our job.”

The effort to carve a new path for ride-hail drivers to collectively bargain in California comes as attorneys for the state and the cities of San Francisco, Los Angeles and San Diego are meeting Tuesday for a closed-door mediation session with Lyft. Another is planned with Uber for next month.

The negotiations stem from yearslong lawsuits by the California labor commissioner’s office, as well as the attorney general’s office and the three cities. Those legal challenges allege Uber and Lyft owe potentially billions of dollars in wages and damages to drivers misclassified as independent contractors before Proposition 22 passed.

Last fall, Massachusetts became the first state to allow ride-hail drivers to unionize as independent contractors. The companies did not formally oppose that measure.

The Massachusetts Department of Labor is drafting regulations on the nuts and bolts of how the measure will work, including what happens if negotiations break down or what behavior constitutes as an unfair labor practice, said Maria O’Brien, who teaches employment law at Boston University.

“Even though Uber and Lyft did not formally oppose this, I would be very surprised if they simply rolled over once the regs are issued,” O’Brien said, pointing to companies’ track record of fighting policies they perceived as threats to their revenue and profits. “It wouldn’t surprise me, depending on what the regulations say, if you were to see lawsuits from Uber and Lyft.”

For the estimated 70,000 ride-hail drivers in that state, an option to engage in collective negotiations could build on gains achieved through a settlement between the Massachusetts attorney general’s office and Uber and Lyft last year, she said.

In that deal, the companies agreed to pay a combined total of $175 million, most of it in restitution to drivers who were underpaid. Uber and Lyft must also compensate drivers at least $33.48 per hour for time spent picking up and driving a customer, an amount that will be adjusted annually for inflation.

“I think that the drivers themselves view the settlement as a promising first step, but view the union as a mechanism by which they’re going to get increases going forward,” O’Brien said.