Since Proposition 22 passed in 2020, it’s faced a long-running legal challenge from labor advocates over whether it’s even constitutional. That fight is over. Here’s exactly how it ended, what actually changed for California rideshare drivers in 2026, and — most importantly if you’ve been in an accident — what none of this changes.
How we got here: Prop 22 and AB5
Prop 22 was a direct response to Assembly Bill 5 (2019), which would have applied the “ABC test” to gig work and presumptively classified rideshare and delivery drivers as employees. Uber, Lyft, DoorDash, and Instacart backed a ballot measure to carve their drivers out of AB5, spending over $200 million on the 2020 campaign — one of the most expensive ballot measure campaigns in U.S. history. California voters approved Prop 22 in November 2020, and it took effect that December, cementing independent contractor status for app-based drivers while adding limited benefits like a healthcare stipend and an earnings floor.
The constitutional challenge: resolved in July 2024
In February 2021, a group of app-based drivers and labor unions sued the state, arguing that Prop 22 — which classifies rideshare and delivery drivers as independent contractors rather than employees — conflicted with the California Constitution’s grant of “unlimited” power to the Legislature to regulate workers’ compensation.
On July 25, 2024, the California Supreme Court issued a unanimous decision in Castellanos v. State of California, rejecting that argument and upholding Prop 22 as constitutional. The ruling ended a nearly four-year legal battle and is the controlling decision on the question today — there’s been no successful appeal or reversal since. Rideshare drivers in California remain classified as independent contractors, not employees.
What’s actually new in 2026: bargaining rights, not reclassification
The real 2026 development isn’t a new legal challenge to Prop 22 — it’s a legislative complement to it. On October 3, 2025, Governor Newsom signed Assembly Bill 1340, which took effect January 1, 2026. AB 1340 gives an estimated 800,000 California rideshare drivers the right to form driver organizations and bargain collectively with companies like Uber and Lyft over pay, benefits, and working conditions — while explicitly preserving their independent contractor status under Prop 22.
In other words, the two laws now work side by side rather than in conflict: Prop 22 (as upheld by Castellanos) keeps drivers classified as contractors, and AB 1340 gives those contractors a formal, legally structured way to negotiate collectively anyway — something that wasn’t previously available to independent contractors under California or federal labor law. It’s a meaningfully different outcome than either side was originally fighting for in the Castellanos litigation.
What hasn’t changed: insurance obligations tied to accidents
Neither Castellanos nor AB 1340 touches Uber’s or Lyft’s tiered insurance coverage obligations. Those are governed separately — most recently updated by Senate Bill 371, which reduced uninsured/underinsured motorist coverage during trips starting January 1, 2026. Whatever happens in the classification and labor-rights space, the companies’ liability coverage requirements during active trips and app-on periods are a separate legal track. See our insurance coverage breakdown for what actually applies when you’re hurt in a rideshare accident.
Why this matters if you’ve been in an accident
If you’re navigating a rideshare accident claim, Prop 22’s classification status — settled or not — has no bearing on your right to pursue compensation. Prop 22 governs whether drivers are employees or contractors for labor-law purposes. It does not shield Uber or Lyft from liability claims when their drivers cause accidents, and it never has. Independent contractor status doesn’t reduce your rights as an injured passenger, driver, or third party.
If you were told your claim is weaker because of Prop 22 or a driver’s contractor status, that’s worth a second opinion. A free case evaluation can clarify what coverage actually applies to your situation, independent of the classification debate. For drivers specifically, see our guide to your rights after a rideshare accident.
This is a general overview of California law and recent legislation, not a substitute for legal advice specific to your situation. Consult an attorney about how these laws apply to your case.