California rideshare drivers are entering a new era. Thanks to a law signed by Gov. Gavin Newsom, drivers for apps like Uber and Lyft will soon be able to form a union and negotiate contracts without losing their classification as independent contractors.
The new legislation, Assembly Bill 1340, requires app-based transportation companies to negotiate in good faith with an organized group of drivers once the union is officially formed. It’s the first major law in the nation to give gig drivers this type of collective bargaining power while maintaining contractor flexibility.
For many drivers, the change feels overdue.
A Driver’s Perspective from the Road
Driver Jason Munderloh, who’s been behind the wheel for rideshare services since 2014, said the bill brings cautious optimism.
“The pay was pretty good, early on,” Munderloh said.
Munderloh left a career in biomedical research to drive full-time and remembers when the work offered both freedom and financial stability.
“The advantages were it’s an exciting job, potentially,” he said. “You get to see the city. You get to meet a lot of people, and the pay is good, and we have real support and dignity for drivers; it can be a great job. And it was at one point.”
But the industry has shifted. The pandemic hit earnings hard, and many drivers say pay hasn’t rebounded to pre-2020 levels. Prop 22, passed in 2020, further complicated things by classifying drivers as independent contractors, excluding them from benefits like paid sick leave, overtime, and unemployment insurance.
Now, drivers like Munderloh hope AB 1340 will begin to change that.
What the New Bill Means for Drivers
Under the new law, companies will be required to negotiate over key issues, including driver pay, deactivations, safety policies, and working conditions. Drivers will have the right to create a union contract that represents their collective interests.
“A union potentially gives us the right to organize and bargain collectively, something we haven’t had before,” Munderloh said. “It’s every driver for themselves as it is now.”
Still, Munderloh acknowledges that the bill isn’t perfect.
“The bill had some flaws, looking more into it,” he said. “My organization, Rideshare Drivers United, identified seven places that the bill should be changed to protect, for example, what our wages are during negotiations? What if we enter negotiations and the algorithm suddenly changes, and they’re not paying us very well? Nobody has had to deal with algorithmic employment before in a union contract negotiation.”
The Challenge of Algorithmic Work
One of the biggest unknowns for drivers is how algorithms that determine fares, trip assignments, and driver rankings will be addressed in union talks.
“We are some of the first workers that are being impacted by AI,” Munderloh explained. “The algorithm that they have will basically find the person who is willing to take the drive for the cheapest, maybe the most desperate person, undercutting everyone else. We’re really facing AI and algorithmic discrimination in a way that no one has.”
This highlights a growing tension across gig platforms, where AI-driven pricing and dispatch systems heavily influence driver income and opportunity. For many, AB 1340 represents the first step toward having a voice in how those systems operate.
Industry Response and What Comes Next
Despite concerns, the law has drawn some unexpected support from within the industry. Lyft’s director of public policy, Nick Johnson, called the legislation “a major victory for both riders and drivers in California.”
At the same time, Newsom also signed a second bill reducing insurance coverage requirements for ride-hailing companies, a move that could lower costs for the platforms.
Still, drivers like Munderloh believe that real change will depend on organization and unity among workers.
“The future of rideshare really depends on drivers themselves, you know, and we know that the city doesn’t function without us,” Munderloh said. “We know that we’re essential workers. It’s just a matter of us coming together and being organized and standing up for ourselves.”
What This Means for California’s Rideshare Community
For rideshare drivers across the state, AB 1340 could mark a turning point, giving workers a seat at the table for the first time in the industry’s history. While the path ahead is uncertain, the movement toward fairer treatment and better pay is gaining traction, one ride at a time.
Image: Digital Market Reports
Source: CBS News
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