California, October 4, 2025
News Summary
California Governor Gavin Newsom has signed AB 1340, allowing Uber and Lyft drivers to unionize and negotiate contracts despite their independent contractor status. This landmark legislation takes effect on January 1 and empowers drivers to secure better pay and working conditions while providing protections against retaliation. The law addresses long-standing demands from drivers for workplace rights, marking a significant shift in the gig economy. However, challenges remain, including the necessity of gathering signatures for union formation and the absence of a guaranteed right to strike.
California Governor Gavin Newsom has signed landmark legislation, known as AB 1340, which allows Uber and Lyft drivers in the state to negotiate for their first union contract, despite being classified as independent contractors. This law will take effect on January 1, signaling a pivotal moment in the drivers’ fight for workplace rights.
Under this new legislation, drivers’ unions that are certified by a state board will have the authority to negotiate on behalf of drivers concerning pay, working conditions, and benefits. Additionally, the law includes protections against retaliation for drivers who engage in union activities. This legislative move is viewed as a critical advancement for drivers who have long sought workplace rights after the passage of Proposition 22 in 2020, which had categorized them as independent contractors.
Federal law typically denies independent contractors the right to collectively bargain, unlike employees who are entitled to benefits such as minimum wage and overtime pay. AB 1340 mandates app-based companies and certified unions to negotiate in good faith on issues that impact drivers, including pay, deactivations, and paid leave. Oversight will be provided by the Public Employment Relations Board, which will facilitate union elections and monitor adherence to any bargaining agreements reached.
Initially, Uber and Lyft were opposed to this new bill, but they shifted their position after reaching an agreement regarding lower insurance coverage requirements through a separate legislative measure, SB 371. However, critics maintain that, although the law enables drivers to organize, substantial challenges persist, particularly in persuading the tech companies to improve pay and benefits for drivers.
To successfully form a union, labor leaders are required to gather signatures from at least 10% of California’s approximately 800,000 ride-hailing drivers, as well as achieve a 30% approval rating for formal union recognition. There is growing concern among driver activists that the new legislation does not guarantee the right to strike, which is vital for enhancing union bargaining power.
This law arrives on the heels of a California Court of Appeals ruling that legitimized the ability of lawmakers to authorize collective bargaining rights for drivers in light of restrictions imposed by Proposition 22. Skeptics question the long-term effectiveness of this legislation, pointing out that companies like Uber and Lyft remain in significant control over driver earnings and working conditions.
Labor leaders also face administrative hurdles before formal bargaining can begin, with projections that negotiations may not commence until as late as 2026. In addition, a comprehensive wage theft lawsuit against Uber and Lyft is underway, as drivers seek to recover back wages and secure better compensation going forward.
AB 1340 and the related legislation aim to strike a balance between reducing ride costs for consumers while empowering drivers within the gig economy. With this new unionization framework, California sets a precedent as the second state in the U.S. to implement such provisions for app-based drivers, following Massachusetts.
Key Features of AB 1340
| Feature | Description |
|---|---|
| Legislation Name | AB 1340 |
| Effective Date | January 1 |
| Unionization Capability | Allows Uber and Lyft drivers to unionize and negotiate contracts |
| Certification Requirement | Driver unions must be certified by a state board |
| Supervision | The Public Employment Relations Board will oversee union activities |
| Negotiation Topics | Pay, working conditions, deactivations, paid leave |
| Signature Requirement for Union Formation | 10% of drivers must sign to initiate a union |
| Approval Requirement for Recognition | 30% of drivers must approve for union recognition |
| Right to Strike | Not guaranteed in the new law |
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 unionize and negotiate for their first union contract.
When does AB 1340 take effect?
AB 1340 will take effect on January 1.
What are the main features of this legislation?
The legislation allows certified unions to negotiate issues such as pay, working conditions, and benefits while providing protection against retaliation for union activities.
How many signatures are required to form a union?
Labor leaders must secure signatures from at least 10% of California’s approximately 800,000 ride-hailing drivers.
Is there a right to strike under this new law?
The legislation does not guarantee the right to strike, which is critical for union leverage and bargaining power.
Deeper Dive: News & Info About This Topic
- Politico: Newsom Signs Landmark Deal for Uber and Lyft Driver Unions
- New York Times: Uber and Lyft Drivers to Unionize in California
- The Guardian: California Ride-Hailing Drivers Gain Union Rights
- LAist: California Gives Uber and Lyft Drivers Collective Bargaining Rights
- San Francisco Examiner: California Uber and Lyft Drivers Closer to Unionizing Rights
- Wikipedia: Gig Economy
- Google Search: Uber Lyft Drivers Union
- Encyclopedia Britannica: Gig Economy
- Google Scholar: Uber Lyft Drivers Unionization
- Google News: California Uber Lyft Drivers Union
Author: Anaheim Staff Writer
Anaheim Staff Writer The Anaheim Staff Writer represents the experienced team at HEREAnaheim.com, your go-to source for actionable local news and information in Anaheim, Orange 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 major conventions at the Anaheim Convention Center, including NAMM and VidCon, exciting games at Angel Stadium and Honda Center, and developments at Disneyland Resort Our coverage extends to key organizations like the Anaheim Chamber of Commerce and Visit Anaheim, plus leading businesses in hospitality, entertainment, and innovation that power the local economy As part of the broader HERE network, including HERECostaMesa.com, HEREHuntingtonBeach.com, HERESantaAna.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
