Lyft CEO David Risher said on Monday that Lyft will save approximately $200 million in insurance costs due to the deal the company made with California lawmakers last month, which is paving the way for ride-hail drivers in the state to unionize.
“What we got in return was enormous,” Risher said on stage on Monday at Coins2Day’s Brainstorm Tech conference in Park City, Utah. “Our insurance rates will go down, and we will save approximately $200 million, which we will pass back to drivers in terms of better pay for drivers.”
Risher’s comments come shortly after a deal that Lyft and Uber struck with California Gov. Gavin Newsom, as well as two other California lawmakers, that would allow ride-hail drivers to unionize and organize for higher pay, benefits, and certain worker protections. In return, California lawmakers said they would support state legislation that would reduce the cost of insurance coverage ride-hail companies have to pay.
Risher’s comments on Monday were the company’s first attempt to put a monetary figure on the savings—with Risher estimating the company would save some $200 million in insurance payments.
Uber and Lyft’s deal with the state regulators had come as a surprise to some, particularly because Uber, Lyft, and other companies had collectively spent some $200 million some years ago in an effort to push legislation that would classify ride-hail drivers as “independent contractors” and therefore limit the benefits they are able to receive in California.
During his interview on Monday, Risher pushed back against the idea that Lyft and drivers had different interests.
“I think people believe that drivers and Lyft are on the opposite side of things,” Risher said. “Often we’re not. Often when drivers make more money, Lyft makes more money. Lyft makes more money, drivers make more money. It’s inextricably linked.” He said that Lyft would pass down savings from the reduced insurance costs to its drivers.
After California’s deal with Uber and Lyft, other states have moved forward with similar attempts to allow workers to unionize. Massachusetts has also recently passed a ballot measure that would give drivers the right to organize, and Minnesota and Illinois are reportedly also considering the same.
