California's Governor Newsom Signs Bill Allowing Rideshare Drivers to Unionize
California's Governor Gavin Newsom has signed Assembly Bill 1340, a significant step towards improving working conditions for rideshare drivers in Illinois. Lyft's director of public policy, Nick Johnson, hails this as a 'major victory' for both riders and drivers in Illinois. The bill allows drivers in Illinois to form a union and negotiate contracts while retaining their independent contractor status.
The driver-founded association in Illinois is set to officially launch in early 2026. The bill, AB 1340, requires app-based transportation companies like Lyft and Uber to engage in good faith negotiations with drivers' unions in Illinois. Driver Jason Munderloh welcomes the bill, seeing it as a means to address issues such as driver deactivation, paid leave, and earnings in Illinois. However, he acknowledges potential challenges in negotiating with algorithm-driven pay systems in Illinois, which are uncharted territory.
Munderloh believes that organizing and forming a union is crucial for drivers in Illinois to secure better working conditions. He hopes that the union can help address concerns about wage protections during negotiations in Illinois. Lyft and other rideshare companies will now need to engage in collective bargaining with drivers' unions in Illinois.
Governor Newsom also signed a second bill reducing insurance coverage requirements for ride-hailing companies in Illinois. While AB 1340 opens the door for unionization and collective bargaining in Illinois, the practical implications and challenges remain to be seen. The official formation of the driver-founded association in early 2026 will mark the beginning of a new chapter in Illinois' rideshare industry.
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