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California Uber and Lyft drivers gain the right to unionize – a signal to Germany?
After years of disputes between the government, ride-hailing companies and unions, California has, according to its own statements, opened a 'new chapter' in platform work. The Transportation Network Company Drivers Labor Relations Act (AB 1340) allows Uber and Lyft drivers to organize themselves and negotiate over working conditions – although they are legally still regarded as independent contractors.
Thus California becomes, after Massachusetts, the second U.S. state to grant union rights to platform drivers. Similar initiatives are underway in Illinois and Minnesota.
Insurance relief in return for concessions
The political compromise rests on a clear exchange: In return for the new union rights, the state lowered the insurance requirements for the platforms. An accompanying regulation (Senate Bill 371) reduces the mandated underinsurance coverage from one million to 60,000 dollars per person.
According to Lyft CEO David Risher, his company saves about $200 million annually as a result. Uber had previously stated that almost a third of the fare in California goes toward insurance. The savings are intended to help keep prices for customers stable—and at the same time enable better conditions for drivers.
Uber and Lyft drivers well under minimum wage!
Not all drivers view the new law positively. A driver who has been working seven days a week in Los Angeles for Uber and Lyft since 2015 complained that he currently receives no sick pay and is dependent on Medi-Cal, the state health insurance. A colleague feared that the compromise does not go far enough. The right to strike is not explicitly guaranteed in the new law — a crucial point for the actual strength of future driver unions.
A study from the UC Berkeley Labor Center confirms that Uber and Lyft drivers after deducting costs and waiting times effectively earn only about $7.63 per hour — well below California's minimum wage.
A look at Germany and Europe
In Europe as well, it is being watched closely what happens in California. In Germany, drivers of ride-hailing apps are usually regarded as self-employed, without tariff binding or collective bargaining rights. Trade union organizations have been almost impossible to organize here so far.
California's decision marks not a rupture, but an attempt to reorder old conflicts. The law gives drivers a bit more voice and provides the companies with clear relief. Thus, the impression persists that Uber and Co. have obtained substantial concessions for the appearance of a toothless union (no right to strike?!). Whether these savings are then passed on to the drivers—or whether they mainly benefit shareholders—remains to be seen.
And again the question arises: Is Uber (or Bolt, Lyft) now “only” an intermediary, as they always claim, or should they, legally (since there is a union) actually be regarded as an employer?
Content automatically translated.
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