Rideshare drivers can unionize while staying independent contractors

SACRAMENTO Gov. Gavin Newsom and California legislative leaders on Friday announced a deal with Uber and Lyft that would let app-based rideshare drivers form unions and bargain collectively while remaining classified as independent contractors. The agreement pairs a collective-bargaining bill sponsored by the Service Employees International Union with a company-backed measure that would significantly lower insurance requirements for rideshare companies, officials said.

Assembly Bill 1340, sponsored by SEIU California, would create a pathway for drivers to organize, negotiate pay and other terms, and seek job protections. Senate Bill 371, backed by Uber and Lyft, would cut the companies current uninsured and underinsured motorist coverage requirement. Under current rules the firms must carry 1 million dollars in coverage per driver for such accidents; the proposed change would require 60,000 dollars per individual and 300,000 dollars per accident, sponsors said.

Labor and industry leaders described the package as a compromise that balances worker voice and cost concerns. Newsom said in a statement that labor and industry "found common ground that will empower hundreds of...