SACRAMENTO, California — For three California Democrats, a labor leader, and the heads of two ride-hailing intended businesses, a year ago, the impossible was accomplished in just under six weeks: a deal was struck between the American labor unions and the long-time adversaries, the technology companies, Uber and Lyft.
In late August, California lawmakers announced the deal, satisfying the labor request for unionization of ride-hailing drivers, in return for the state significantly scaling back insurance provisions, which the companies in the state vehemently opposed, claiming the costs were too high. Support for the deal was unusual in that it was publicly supported for the first time by Gov. Gavin Newsom. Over the past week, state lawmakers have given the final stamp of approval.
According to interviews with five people directly involved, negotiators understood the scope of the collateral damage: the waste of time and resources on a campaign for a multi-billion-dollar ballot initiative, or on which two deeply opposed parties would wage a lengthy court struggle.
Their reasoning revises the assumptions that were settled on the party regarding the pace and construction of the deal. How it was started, the people who were included, and the efforts that were made in relation to the document. “Uber and Lyft aren’t like most other app-based hires. They are singular. These are the only other states that have framed legal policy. Massachusetts framed it in 2024. California, uniquely, did it this way without the mandated post-voting wrangling.
In 2020, California made a ballot initiative, and the entire budget blew over $200 million. Of which, California set the most aggressive budget. This initiative helps app-based workers from being lassoed as employees. This defense under demeaning circumstances, as Proposition 22 Uber and Lyft made legal inroads, which appealed against labor mechanisms.
This July, Uber and Lyft voters lost, and legislation for the Proposition was going through. The Proposition was that the Uber and Lyft workers won. This was a consideration vote; the principles retained and did not shift off the center position.”
“Frankly, these efforts, as they are framed for the ballot, are hopelessly disappointing. But it is better than the absent position. Our legal and workplace expectations and protections failed and remained out of the notebooks for a long time. The appended change could lead to the “-” being designed in. But results for the working base and financially, the recovery was not in the maximum margins. The rest is historical.
Whatever points remained as the ` firm side, this was the center point for push.”
“Sure, no one really wants to have to go to court with someone who has more money than you, especially if it drags on for years and years. During this time, people who should be receiving their rights will still be waiting for their rights,” said Tia Orr, who serves as SEIU’s executive director and one of the biggest labor leaders in the state.
But the deal still has more in store before it is set in stone. An ongoing lawsuit has sparked new attention on the origins and intent of the deal. Additional criticism from people outside the deal is forcing the deal makers on the defensive as they attempt to push it to close more. Additionally, the final deal is not as promising as what some labor leaders wanted when they wanted to strengthen driver rights back in 2019.
“With the influence of Prop 22, there are so many restrictions on us. It’s not what I had in mind for employees’ union involvement and status,” remarked California Labor Federation President Lorena Gonzalez, who put into law in 2019 the Proposition that unionized rights for drivers on the app would have had, which Prop 22 abrogated.
The agreement does give gig workers the ability to unionize, but it doesn’t guarantee that out of the 800,000 ride-hailing drivers in the state, 10 percent will actually join. Many of those who drive for Uber and Lyft do so on the side, and the labor leaders understand the difficulty in trying to bring together individuals who lack any means of interaction. “That’s going to be hard,” said Orr.
Meeting of the Minds
Although formal negotiations of the deal started in July, the parties on either side had already been strategically planning months in advance on how to achieve their end goals for the agreement; labor would receive bargaining rights, and Uber and Lyft would have lower insurance obligations.
In the last week of March, Uber and Lyft partnered with first-term state Senator Cabaldon, Democrat, to submit a bill that “definitely” would cut the $1 million minimum insurance liability requirement to crashes with underinsured drivers.
The companies’ own research claimed that the state’s 10-year-old California requirement was the only one in the country and was also reducing the earnings of drivers. Uber claimed the restriction was the reason for 32% and 45% increases in ride-hailing prices in California and Los Angeles County, respectively.
In early April, Democratic Assemblymembers Buffy Wicks and Marc Berman, with the help of SEIU, proposed a bargaining policy for gig workers as a reaction to the state Supreme Court’s decision on Prop 22. This decision ruled that drivers for apps could not independently negotiate on contractor benefits such as pay rises and health insurance. However, this decision also set the stage for lawmakers to create a special framework for gig workers.
Although the two proposals for driver unions and insurance discounts were initially independent, their fates became entwined as Uber and Lyft intensified their opposition to the drivers’ union and unions began supporting the companies’ insurance effort.
“In those moments,” said Wicks, “having this may be the thing we need for this convergence.” “From the beginning, we were asking what each constituent wants, and how we arrive at the outcome where no one is getting everything, but everyone is getting something?”
During the spring committee listening sessions, lobbyists for Uber and Lyft claimed that SEIU’s attempt at unionization violated Prop 22, meaning California may face another long court battle if it advanced an organizing framework without Uber and Lyft’s sponsorship.
Then, around the middle of July, a group of progressive, labor-aligned representatives warned the companies in a series of consecutive Assembly committee sessions that their pursuit of low-cost insurance was inviting ruin without stronger promises around reinvestment of the additional savings into worker benefits.
You, Democratic Assembly member, “Chris Rogers, on July 16, said, from the perspective of if you can try to put any of these within the law, it will be easy for you to gain that much more backing.”
Berman and Wicks were willing to negotiate with Uber and Lyft on driver unions. However, Berman, Bickin, and Wicks were too willing to negotiate with Uber and Lyft on driver unions. Cabaldon, for his part, said the Assembly committee meetings served to make clear the link between low-priced offerings and driver benefits.
And as the end of August approached, Uber and Lyft had more reason to come to an agreement and avoid attrition, since the last appropriations hearing of California was just around the corner, and it would determine the outcome of numerous debated bills. Wicks was the head of the assembly appropriations panel while Cabaldon was a member of the corresponding committee in the Senate.
“Some of the factors contributing to an increase in prices are a shortage of drivers willing to provide a ride. So, you can’t just take care of riders and ignore some of the compensation and other concerns regarding the drivers,” Cabaldon stated. “That’s when it got solved.”
‘A hospital-based deal’
Agreeing to terms from both sides happened in a rush; the period from July to August was spent in a frenzy, but it required a fair bit of bargaining, as there were no preexisting frameworks to base it on. Only one other state, Massachusetts, enacted a similar bargaining system for Uber and Lyft drivers, but that was through a voter-passed ballot initiative, rather than through standard legislation.
In addition, the idea for the organizing drivers was an example of sectoral bargaining where the workers of a particular industry negotiate as a single entity, as opposed to bargaining with each employer separately. This idea is still fairly new to California, and it raises some controversies among labor advocates.
In recent years, SEIU and other labor organizations have taken a sector-by-sector approach to win minimum wage increases for healthcare and fast food workers in California. However, some critics argue that the approach is too slow in obtaining additional benefits for workers.
“It has been so divided,” John Logan, a labor historian at San Francisco State University, told me. “There are people in the labor movement who say, ‘No, we should not regard any as a concession, a complete employee status for gig workers.'”
Shedding some light on the internal deliberations in the labor movement, John Logan pointed in particular to the reasoning that has managed to win. “It was really having the relationships,” was the statement from the other side of the table. They were Wicks, Berman, Cabaldon, Orr, Prieto , and Nick Johnson of Lyft.
Like the deals she put together with Google over journalism funding last year, Wicks had had experience with striking legislative deals with tech companies in the past. The ‘newcomer’ Cabaldon, having served as the West Sacramento mayor for two decades, was a pragmatist who understood the details of sectoral bargaining.
“And when tempers flared, negotiators said Berman’s sense of humor made them feel anchored, as did the baby he had just had, who guested on Zoom.”
“He had a different approach. If things became very tense, he would ask everyone to calm down. He would just say, ‘Look at my baby,'” said Orr. “That was able to calm us down and keep us on track.”
In fact, many of the conversations were about the haste the participants felt. His talks were very casual. He was even in the middle of emergency eye surgery.
Like most of the people involved, the late former assemblyman Roger Hernandez Cabaldon recalls the completion of the deal in a humorous light, as he remarked, “This was a hospital-based deal. I suggested to Berman, and he did not take my suggestion, that he name the baby’ sectoral.'”
During the negotiation phase, I was told that both Assembly Speaker Robert Rivas and Senate Pro Tempore Mike McGuire were updated and informed of the negotiations, but had no involvement until the official announcement was made in August. Newsom’s staff was, as expected, informed of the details and was responsible for the specifics about the implementation of sectoral bargaining for ride-hailing drivers that was allocated to state labor agencies.
I. And my need for a state for McGuire and Rivas painstakingly, but not the goals, of each of these two bills. Their two preserved deal, in support of Rivas and McGuire, retained the major aims of both measures. In 2026, ride-hailing drivers will be able to advocate for the union, and Uber and Lyft’s liability for underinsured driver incidents will shrink to 300 thousand dollars.
Newsom referred to the deal as ‘historic’ upon releasing his proclamation. However, such characterizations did not stop the critics.
The suit was a shock. It was not just the sensation of a barnyard beast that was the crux of the case, but rather that the separation of Rivas and his politically acute brother, Rick Rivas, was a believed design to benefit the two lineages.
Cynthia Moreno, a former staffer to the speaker, has a lawsuit that claims, without proof, that the Rivas brothers negotiated the union agreement to get SEIU’s backing for the Proposition 50 redistricting ballot. Newsom, along with his allies, has been advancing the measure to counter efforts, spearheaded by Donald Trump, to redraw maps in the red states.
Elizabeth Ashford, Rivas’ representative, noted that the lawsuit is meritless. Uber, Lyft, SEIU, along with the three lawmakers who negotiated the controversial ride-hailing contract, all firmly denied the existence of a connection between Prop 50 and the ride-hailing contract.
Berman remarked, “Never have those two things [redistricting and driver unions] been discussed in the same sentence, in the same meeting, in the same thought in my head.”
In reference to the lawsuit’s claims about the ride-hailing deal, Orr simply stated, “full stop, there’s just no truth to it.” It is noteworthy that the denials have not alleviated questions about why the agreement was made in secret. “Pretty good example” is what Republican Assembly member Carl DeMaio, who has opposed labor unions for a long time, called the deal in relation to organized labor’s influence in Sacramento. “On the Assembly floor on September 9, ‘We will not observe the enhanced benefits that could be offered to workers and drivers,’ said Mr. DeMaio. ‘We will, however, observe the union coffers swell. ‘
“Questioning the agreement is not only the republicans. Veena Dubal is a law professor who specializes in the gig economy, and she is based at UC Irvine. She stated that the compromise the workers have to settle on is a union of sorts, a subservient union that allows no real bargaining and, in exchange, grants Uber and Lyft a subsidized policy that endangers the other drivers with no coverage.’
“Under the agreement, unionized drivers would be allowed to negotiate paid leave, some paid compensation, other benefits, deactivations, and health insurance. However, several subjects are not negotiable, according to the Uber and Lyft policies, such as base fare pricing and other core functions of Uber and Lyft. These functions are app design, complex algorithms, and other necessary software for Uber and Lyft.”
Some people wonder where SEIU Region’s chair, Dubal, obtained the basis of a contract in California that does not yet exist. She told POLITICO there are “a number of unions” that “are very upset” about the deal not being negotiated, such as the Rideshare Drivers United located in Los Angeles. “I’m really concerned that with the way things are headed, workers won’t get much from this,” said Dubal in a discussion.
Furthermore, “I’m really concerned this moves towards a much weaker, diluted, and truly representative organization that fights for a driver’s interests in California,” said Dubal. Either with him or alone, there would interfere the San Francisco Professor Logan. Both of them argued that the deal benefits SEIU the most.
To support this, they pointed out parts of Wicks’s measure that state any union group that represents a driver must have at least five years of advocacy work prior to the union group.
“There are a number of other labor groups that have been trying to organize gig workers, and they will most likely be excluded,” said Logan. “For these groups, the barriers to entry will be the greatest,” according to SEIU’s statement, “the provisions are designed to be sure there are no fake and corporate union-type excuses for sponsored unions.
The drive must demonstrate that her,” said the Polon, spoke of the union for the workers. “The union will be obliged to possess the drive of these workers.”
While talking from the Assembly floor on September 9, Wicks defended herself from claims that she practiced political favoritism. She characterized herself as an “independent thinker” legislator who “calls balls and strikes.”
“I’m nobody’s voiceless,” Wicks said. “This is business and labor coming together to solve a problem.”
And to David Madland, who is a Sectoral Bargaining advocate and a Fellow at the non-partisan Center for American Progress, said “really good” things about the agreement, much as Prop 22 drastically limited bargaining scope for drivers on the app.
“This is a good way of providing an opportunity for these types of workers to access benefits that they wouldn’t otherwise be able to get,” Madland said. “Other states should be able to pick up this policy; it’s a truly great experiment.”
Even Gonzalez, the president of the Labor Federation and one of the resounding supporters of granting drivers full employee status as opposed to Independent Contractors, softened their stance about the agreement to some extent.
We win “Anytime that we provide more empowerment to workers to voice their opinion at the table,” she said.
In Massachusetts, the drivers are still collecting signatures in order to achieve the unionization goal. State framework has brought ire for Teamsters President Sean O’Brien, who claimed the state’s sectoral bargaining framework for independent contractors aids “corporate pigs that want to avoid full employment rights for workers.”
Orr pointed out that in California, the one-of-a-kind agreement makes unionization, well, complicated. Beginning in May 2026, union leaders must acquire no less than 10 percent of the nearly 800,000 ride-hailing drivers in the state to sign union cards.
After this, union leaders must acquire an even larger proportion of the drivers to favor the union election before being able to bargain with Uber and Lyft for the rest. “They don’t have a breakroom or a lunchroom,” Orr remarked. “We have to look for creative ways to access them.”
She then concluded with, “We are ready.”
