California Uber and Lyft drivers cleared to unionize

Uber (Uber) and Lyft (LYFT) drivers in California are now able to unionize while still remaining independent contractors after the two companies worked out a deal with Governor Gavin Newsom and state lawmakers.

According to the Los Angeles Times, Newsom, Assembly Speaker Robert Rivas and Senate Pro Tem Mike McGuire will back a compromise that would advance the collective bargaining bill out of the legislature along with a bill sponsored by Lyft (LYFT) and Uber (NYSE:UBER) that would “significantly reduce” both companies’ insurance requirements for ride-share drivers.

Under the previous law, the ride-share companies must carry $1M in coverage per driver for accidents caused by other underinsured or uninsured drivers. Under the current agreement, Uber (NYSE:UBER) and Lyft (LYFT) can instead carry underinsured or uninsured motorist coverage of $60,000 per rideshare driver and $300,000 per accident.

The two bills “represent a compromise that lowers costs for riders while creating stronger voices for drivers,” Uber’s head of public policy for California said in a statement.

For drivers, the agreement allows for negotiated pay, and would exempt the workers from the state and federal anti-trust laws that would prohibit collective action by independent contractors.