On August 7, Illinois Gov. JB Pritzker (D) signed a law enabling Uber and Lyft drivers to unionize, making the state the third in less than two years to enact a pathbreaking new model for rideshare drivers to collectively bargain. Through this new sectoral bargaining process, drivers hope to improve their low pay and benefits as well as address other issues such as firing by algorithm and the looming threat to their livelihood posed by robotaxis.
Massachusetts voters pioneered the new bargaining model with a successful November 2024 ballot initiative and California enacted similar legislation in 2025. Drivers in other states, such as Minnesota, are pushing similar policies.
Under the new bargaining laws, drivers can form a union and bargain collectively through a faster and better process than under the National Labor Relations Act (NLRA), the federal law that controls most private sector unionization efforts. For example, drivers can gain contact information to discuss the union with coworkers and start bargaining sooner than under federal law and they can access an arbitration process to prevent common employer-delay tactics. The new state laws also provide for sectoral bargaining that aims to cover all drivers in the sector—from full to part time—with a union contract, no matter how firms try to structure their work.
Sectoral bargaining is well suited for a difficult-to-organize, “fissured” industry with a dispersed workforce, such as rideshare. Studies find that workers in hard-to-organize occupations are “more likely to be organized in unions” under sectoral bargaining systems. Sectoral bargaining also boosts wages, benefits, and other standards for more workers than the single worksite standard of the NLRA—and also enables companies to compete on a level playing field.
Though implementation of this new policy model is still in the early days, initial signs are promising. In Massachusetts, the App Drivers Union was certified by the Massachusetts Department of Labor Relations in May as the official bargaining representative for approximately 70,000 rideshare drivers in the state, allowing drivers to start legally bargaining for a contract to improve their pay and benefits. This is the largest new private-sector bargaining unit since 1941, when more than 80,000 Ford workers at the River Rouge plant in Michigan unionized and selected the United Auto Workers as their bargaining representative. In California, drivers are actively organizing to become certified for bargaining.
Rideshare drivers are seeking to address a range of issues through collective bargaining. Drivers face low pay per mile, inadequate benefits, and occupational injuries. They also contend with algorithmic compensation-setting and surveillance as well as the threat of deactivation—and major hurdles to getting reactivated. Furthermore, the rideshare industry could be among the first hit by major job losses due to artificial intelligence and related technologies as autonomous vehicles become increasingly common.
Around 1 million workers would gain union coverage if the approximately 70,000 rideshare drivers in Massachusetts, 800,000 in California, and 100,000 in Illinois can reach collective bargaining agreements with rideshare companies. That would mark a major shift for workers and unions, reversing approximately 20 years of gradual decline in private sector bargaining coverage.
States have the legal authority to enact this model unless a series of unlikely events occur: the Trump administration changes course and finds that drivers are employees under the NLRA rather than exempt independent contractors, and courts support such a ruling.
The rapid spread of this new policy model highlights workers’ strong desire to unionize and the need to fix labor law in the United States. Half of all workers say they would like to join a union but just 6 percent of private sector workers are members because federal labor law makes it very hard for workers to form a union and negotiate a contract.
With the passage of a new law in Illinois and implementation in Massachusetts and California, states are showing a path forward. Rideshare sectoral bargaining policy could continue advancing in other jurisdictions, and this promising model of organizing and bargaining could even be adapted for other industries.