California’s Rideshare Gig Workers: Unionization Was the Plan All Along

California Governor Newsom, the Senate and Assembly “deliver landmark solutions in partnership with SEIU, Uber and Lyft that will provide a pathway to unionization for more than 800,000 workers and bring down the cost of rideshare services,” Democrats announced Friday.

“In partnership with SEIU,” Uber and Lyft won’t have a chance. They may as well become a taxi service.

Remember in 2019, AB 5, authored by Democrat Assemblywoman Lorena Gonzalez (who left the CA Legislature early to head up the California Labor Federation), completely redefined independent contractors in California, as well as greatly reducing the number of contractors in the state by creating an “ABC test” that instead made them employees, or put them out of work.

AB 5 was passed by Democrats in the California Legislature and signed into law in 2019 by Gov. Gavin Newsom.

The problem was they dragged all other independent contractors into the fray, and killed off their jobs too – independent truckers, traveling physicians and nurses, musicians and actors, and many others.

So in November 2020, in response to this anti-capitalist law, California voters overwhelmingly passed Proposition 22, to exempt all rideshare drivers from being classified as employees. California’s Supreme Court even upheld Proposition 22, allowing drivers at Uber, Lyft, and other ride share companies to operate as independent contractors, rather than employees.

However, it was only a matter of time before the hammer came down on the independent-minded workforce:

Fulfilling a promise to address everyday affordability for millions of Californians, the Governor, Senate Pro Tem and Assembly Speaker are proud to announce support for AB 1340 (by Assembly members Buffy Wicks, Marc Berman), which is sponsored by SEIU California; and SB 371 (by Sen. Chris Cabaldon), sponsored by Uber and Lyft.

“This is a historic agreement between workers and business that only California could deliver,” Governor Gavin Newsom said. “Labor and industry sat down together, worked through their differences, and found common ground that will empower hundreds of thousands of drivers while making rideshare more affordable for millions of Californians. It’s proof that California can do big things, tackle tough issues, and improve peoples’ lives.”

“Industry” had no choice but to capitulate to California’s Big Labor. They even admit this in the bill analysis (see below).

“For almost a decade, thousands of drivers have fought for a better life,” Senate President Pro Tem Mike McGuire said. “This a big damn deal, uplifting workers and the Golden State’s economy.”

There is no Golden State economy anymore.

“This is momentous. Hundreds of thousands of California gig workers are headed toward better pay, and Uber and Lyft rides will be more affordable for millions of residents,” Speaker Robert Rivas said.

McGuire, Rivas, Wicks and Berman all voted to pass AB 5 – they’ve been in for the long game.

The reality is, thousands of drivers started driving for Uber and Lyft to improve their lives, and many did it as a side gig. Some were actors who supplemented their income between acting and theater jobs. Some were musicians. Some were insomniac moms who drove at night making money when they couldn’t sleep and dad was at home with the kids. Some were college students who drove between classes, on holidays and breaks. Some were recent immigrants earning an income. Some were retired people who wanted to stay busy and social.

These are all people I have personally spoken with in an Uber. California has been killing their flexibility.

Also as punishment, California imposed a $1 million liability coverage requirement Uber and other transportation network companies), which Uber reported “is more than 30 times that of personal vehicles on the road, which is required at just $30,000 per person. It’s also far higher than that required of taxis, at 10 times the LA and San Francisco coverage requirements per person (taxi requirements change from city to city).”

Now, driving a stake through the heart of those who want the independent contractor status, we have two bills:

Assembly Bill 1340 will create an opportunity for the largest organizing effort in a generation by enabling rideshare drivers to have a voice in the future of their industry, and provides a historic pathway for California’s more than 800,000 rideshare drivers to have the choice to join a union and negotiate for better wages, benefits, and protections. Through the passage of this framework, the state will place power in the hands of a quarter-million workers to raise the bar in their industry and create a model for an equitable and innovative partnership with California’s technology sector.

Senate Bill 371 will reduce the cost of providing rideshare services for Californians and remove the burdensome requirement that rideshare drivers carry $1 million in coverage for accidents caused by other drivers who are uninsured or under-insured — a cost that today is passed on to riders. The agreement calls for $60,000 in uninsured motorist coverage per individual and $300,000 per accident.

AB 1340 is so bad, it’s been placed on the suspense file… until next year. SB 371 may actually help Uber/Lyft drivers, except it also is on the suspense file – Democrats don’t want the independent drivers enjoying the reduced insurance requirement – that’s only for the unions.

Speaker Robert Rivas added, “While Trump is stripping workers of bargaining rights and rolling-back protections, California is fighting for lower prices and empowering working families. What a way to celebrate Labor Day weekend.”

Yay! California does it again!

Here is the bill analysis: