Uber announced in a press release that California's SB 371 will lower rideshare Uninsured Motorist/Underinsured Motorist (UM/UIM) insurance costs while preserving core protections. Additionally, AB 1340 will allow drivers to opt into sectoral bargaining without affecting their status under Proposition 22.
According to Uber, a broader compromise underpins the announcement: Governor Gavin Newsom and legislative leaders brokered a package linking insurance reforms (SB 371) with a new sectoral bargaining framework (AB 1340). The deal maintains drivers' classification as independent contractors under Proposition 22 while creating an opt-in path to representation and preserving high on-app coverage standards. The linkage is designed to deliver measurable fare relief as insurance mandates are adjusted, while channeling driver voice through a timeline and process set to roll out in 2026.
Public reporting details the core insurance change and market implications. SB 371 reduces the rideshare UM/UIM requirement from the legacy $1 million to $60,000 per person and $300,000 per accident. Analyses note that insurance can account for up to approximately 45% of fares in parts of California. Observers project that aligning coverage with broader vehicle norms should translate into lower premiums embedded in trip prices, supporting higher demand while maintaining $1 million liability coverage for driver-caused crashes.
The labor side carries its own numbers and dates. According to AP reports, more than 800,000 California ride-hail drivers gain the right to unionize and bargain while remaining independent contractors as part of the same package that lowers UM/UIM requirements. Coverage notes potential nine-figure savings for platforms and a staged process before recognition and bargaining can begin, with implementation milestones extending into 2026—factors that shape how quickly riders see price effects and drivers see contract talks.
Uber Technologies, Inc., founded in 2009 with headquarters in San Francisco, operates global Mobility, Delivery, and Freight platforms. The company’s safety and insurance stack includes $1 million liability during trips, occupational accident coverage under Proposition 22 in California, and additional vehicle protections. Uber's scale allows it to pair policy changes with in-app pricing, incentives, and operations, enabling rapid pass-through of cost reductions to riders and earnings opportunities for drivers while maintaining compliance across jurisdictions.