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California ride-hailing drivers just won a crucial round in their pursuit of the right to unionize, but the political drama around the process and among the state’s drivers groups raises plenty of questions about what comes next.

Lawmakers sent Assembly Bill 1340 to Gov. Gavin Newsom on Tuesday, but it’s merely a formality. The governor had already expressed support for the legislation in a deal he announced with Senate President Pro Tem Mike McGuire and Assembly Speaker Robert Rivas at the end of August.

The state’s top politicians tied the unionization bill to Senate Bill 371, which is backed by Uber and Lyft and is also expected to pass this week. It drastically lowers the amount of uninsured and underinsured insurance coverage Uber and Lyft are required to provide, which they argue inflates costs for both drivers and passengers. In exchange, the ride-hailing giants dropped their opposition to the unionization bill.

Critics of the deal say it mostly benefits the ride-hailing companies, which in 2020 wrote and passed a ballot proposition to keep drivers classified as independent contractors. Both firms are likely to drive a hard bargain with a drivers union, experts say.

“I think it’s a sign of California politics that these large tech companies are literally getting their cake and eating it, too,” said Veena Dubal, a law professor at UC Irvine who focuses on labor and inequality.

Uber called the deal a “compromise,” but a spokesperson would not answer CalMatters’ question about whether the company commits to bargaining in good faith if the drivers vote to form a union. Lyft also expressed support for the deal, but a spokesperson for the company would not comment on the unionization bill.

There’s even more political intrigue surrounding the unionization bill: A new lawsuit filed by Rivas’s former press secretary, Cynthia Moreno, alleges Rivas made a deal with the Service Employees International Union over the unionization bill in exchange for its support for the state Democrats’ redistricting effort that will go before voters in November.

Maya Polon, a spokesperson for SEIU California, said “the allegations are completely unfounded.” A spokesperson for Rivas said the speaker would not comment but sent a statement from Lia Lopez, chief administrative officer for Assembly rules: “This complaint is a total fabrication.”

The mention in the lawsuit aside, the political maneuvering surrounding the two bills and the dissent among drivers groups already present complications as California becomes the second state behind Massachusetts to allow ride-hailing drivers to unionize.

Consumer and labor groups opposed the insurance bill, which reduces the ride-hailing companies’ coverage requirement for crashes involving uninsured and underinsured motorists from $1 million to $60,000 per person and $300,000 per incident. They said it shifts the burden and potential remaining liability to consumers and possibly the state.

Opponents of the bill had included the California Federation of Labor Unions. But when CalMatters asked Lorena Gonzalez, who leads the group, why she wanted the insurance bill tied to the unionization bill, she said only that her group “supports every effort to give more workers a voice on the job and a chance to collectively bargain.”

CalMatters also asked the same questions of McGuire and Rivas, as well as of Assemblymember Marc Berman, the Palo Alto Democrat who co-authored the unionization bill. They did not respond.

State Sen. Chris Cabaldon, the Napa Democrat who authored the insurance bill, said through a spokesperson that he expects both bills to benefit drivers and riders: “My interest in carrying SB 371 was to lower fares for people who use rideshare for necessary transportation to their jobs, school, or medical appointments.”

The governor’s office referred CalMatters to Newsom’s statement from Aug. 29, when he announced the deal tying the two pieces of legislation together. He said then: “Labor and industry sat down together, worked through their differences, and found common ground.”

The authors of both bills have received contributions from Uber, Lyft and the SEIU, according to state records.

Drivers groups at odds

Now that the state’s 800,000 drivers have gained those rights, they will need to choose a union to represent them.

The SEIU, which sponsored the legislation, will likely become the drivers’ representative, thanks to late amendments to the bill. They include new requirements that make it tough for fledgling drivers unions to qualify to represent drivers. One of those requirements is experience negotiating union contracts.

“This is so outrageous,” said Nicole Moore, president of Los Angeles-based Rideshare Drivers United, adding that because the ride-hailing industry is fairly new, even a group like hers, which has been organizing drivers since 2018, does not have that experience. Moore said her group had supported the bill and been engaging with lawmakers as well. “They pulled the rug out from under us,” she said.

A spokesperson for Assemblymember Buffy Wicks, who co-authored the bill, referred CalMatters to the SEIU.

Polon, of SEIU California, said: “The amendments are meant to ensure fake or corporate-sponsored unions are excluded, and that any organization which is representing these workers has the ability and expertise necessary to represent these workers.”

What could be next

Jaime Lopez said he thinks a union will help improve his pay and working conditions.

Lopez, 60, drives for Uber and Lyft in Los Angeles. He was in Sacramento last week, rallying with other drivers ahead of the unionization bill’s passage. Lopez said he has been driving since 2015 and has seen his wages decline over the years. He added that he works seven days a week, doesn’t get paid when he’s sick and uses Medi-Cal for health care.

“Maybe the union can do something about it,” he said. “I’m sure something’s going to change.”

But experts who examined the bill and its amendments are skeptical.

“Real collective bargaining for gig drivers would mean a major shift in the business model of these companies,” said John Logan, professor and chairperson of Labor and Employment Studies at San Francisco State University. “Any improvement in conditions for gig drivers should be welcomed, but how much of a voice they’ll actually get is unclear,” Logan said.

Dubal, the UC Irvine professor, has seen previous efforts to create what she calls “top-down company unions,” which she thinks is what’s happening here. She said language in the bill “creates a mechanism to get a single union to get dues (from drivers), plus money from the company.”

That language, says Polon of SEIU, allows drivers to negotiate “contributions or fees for a separate fund for the administration of benefits and services” including for representing drivers in cases of deactivation, or when they are kicked off the apps.

Nelson Lichtenstein, a professor at UC Santa Barbara who has written books about labor history, said sectoral bargaining — or negotiating as a group in a common occupation — makes sense for fast-food workers, for example. “It’s hard to organize McDonald’s franchises,” he said. “But this is different. Uber is a gigantic corporation with a lot of resources.” Because of that, he said a union should demand more for drivers.

Lichtenstein did point out a provision of the legislation that he thinks will be positive: Ride-hailing companies will be required to share more concrete information about drivers, rides and earnings. There is often a wide gap between what the companies say drivers earn and what drivers and labor groups report about earnings.

“The release of data will put pressure on Uber and Lyft,” he said.