AB 1340, the California bill which grants app-based rideshare drivers the right to form a union passed the California legislature last week and was signed into law on Friday by Governor Gavin Newsom. Touted as an “historic milestone for California’s gig economy” and empowerment to the 800,000 California gig drivers, what it essentially does is ensure the model’s demise and the limitation, if not full elimination of human-fueled rideshare transportation in the state.
According to CBS News,
California rideshare drivers will have the ability to form a union and negotiate a contract, while still being classified as independent contractors.
A new law signed by Gov. Gavin Newsom on Friday, Assembly Bill 1340, requires app-based transportation companies, like Lyft and Uber, to negotiate in good faith with a soon-to-be-formed drivers’ union.
The passage of this bill lays waste the battles waged in 2020 to get the ballot measure Prop. 22 passed. This was not even a year after the damage done by Assembly Bill 5 (AB5), which outlawed independent contracting in the state. The 2019 passage and the 2020 enforcement of AB5 upended the lives of freelancers and small businesses across 600 professions. Uber and Lyft poured in $204 million to get the initiative on the ballot, and rideshare drivers marketed and pushed for their right to remain independent contractors. Independent professionals chose to lock arms with app-based gig drivers to champion for Prop. 22, knowing that even though it did not change the calculus for all independent contractors, Prop. 22’s passage would be a significant blow to the veracity of AB5.
California voted 59% to pass this measure. So, it is a slap in the face that the will of the voters and the gig workers, who fought to maintain their independent contractor status, continue to be undermined and used like cogs in the machine.
State Sen. Tony Strickland (R-Huntington Beach) echoed this perspective in a speech on the floor of the Sacramento Capitol as the bill was being debated. Strickland said,
I believe this bill undermines the voter approved Proposition 22, that was approved by 59 percent of California voters.
I do believe this disrespects the will of the millions of people who supported Prop. 22. I believe this bill attempts to end-round the National Relations Act which excludes independent contractors, which include app-based drivers under Proposition 22 from unionization.
Yet, here we are. The Service Employees International Union (SEIU), which sponsored the bill, is celebrating this victory, especially over the Trump administration:
Trump is gutting workers’ fundamental right to come together and demand fair pay and treatment,” said Tia Orr, Executive Director of SEIU California. “But here in California, we are sending a different message: when workers are empowered and valued, everyone wins. Shared prosperity starts with unions for all workers.
State Assemblyman Carl DeMaio (R-San Diego) warned that passage of this bill would lead to forced unionization and increased cost to the consumer and the taxpayer:
It has been said that organized labor controls this building, and I would say that this bill would be pretty good evidence to support that view. Organized labor wants to use the power of government to compel people into their ranks. So that they can start taking money out of their paychecks. That money then comes back up here to this building in the form of campaign contributions. That is the perfect definition of a ‘swamp.’ […] [W]here government puts its thumb on the scale to force people into a labor union, whether they like it or not.
Long odds predict that, just as with the fallout from AB5, rideshare drivers will ultimately not like the end result. Just as California’s AB5 has infected the nation, with AB5-like restrictive measures being considered in Minnesota and New Jersey, this new California law is a bellwether to the erosion of the rideshare model in other states.