The city of Seattle passed a law Monday that would grant Uber and Lyft drivers the right to form labor unions, a bold regulatory maneuver that could test the labor model behind the popular ride-hailing apps.
The measure passed the Seattle City Council in an 8-0 vote. But the city's Democratic mayor still needs to sign the law, and it will almost certainly face a legal challenge from Uber and other companies that could tie it up in court for years.
The bill was championed by Councilmember Mike O'Brien, who has called the modern ride-for-hire industry "a race to the bottom." Just ahead of the vote, another council member, Tom Rasmussen, said the expected lawsuits were merely "the cost of seeking innovative policies."
Like a lot of other companies in the so-called gig economy, Uber and Lyft classify their drivers as independent contractors, rather than employees. Under federal law, independent contractors do not have the right to band together and bargain collectively over wages and working conditions the way employees can.
That's where Seattle's city council has stepped in. Under the bill passed Monday, "for-hire drivers" would be legally entitled to seek out "exclusive driver representatives" for the purpose of collective bargaining -- i.e., labor unions. If a majority of drivers at a particular company designate a union as their representative, then by law the company will have to bargain with the union within the city of Seattle.
The law has implications well beyond Uber and Lyft. Many traditional taxi drivers are classified as independent contractors as well, and would have new rights under the law.
At least, they would if the law ever goes into effect. Uber and others in the industry are expected to challenge the law in two possible ways: by claiming that it conflicts with federal labor law, and by arguing that it runs afoul of antitrust law.
In the first scenario, the companies could argue that the local Seattle law is pre-empted by the federal National Labor Relations Act, which covers collective bargaining in most of the private sector. The problem there for Uber et al. is that the federal law specifically excludes independent contractors, and that's who the Seattle bill is seeking to cover.
Wilma Liebman, former chairwoman of the National Labor Relations Board, told The Huffington Post that she doesn't see a conflict with federal labor law unless the labor board deems Uber drivers to be employees, which could bring them under the board's jurisdiction.
"The Seattle law is intended to give collective bargaining rights to those who are independent contractors," Liebman said. "To that extent, there's no pre-emption problem."
If the labor law argument doesn't hold, the industry could still fight the legislation with antitrust law. Under that scenario, Uber and others may argue that drivers banding together as independent contractors -- and presumably raising the cost of their labor -- amounts to illegal price-fixing.
Seattle Mayor Ed Murray outlined his own concerns with the bill in a letter to councilmembers on Monday, saying that the legislation includes "several flaws." Murray wrote that the local collective bargaining process needed to be clarified. He also said the cost of regulation would be "significant" and that the bill "fails to adequately examine" government expenses.
As independent contractors, Uber and Lyft drivers cover the cost of shuttling their passengers around. They provide their own cars, pay for their own gas and have to foot the bill for any repairs. Uber refers to its drivers as "partners," and notes that they make their own schedules and only work when they want to.
It's an arrangement that many retirees and other freelance drivers seem OK with. But plenty of drivers who try to make a full-time living out of it have their grievances. One of them, an outspoken Seattle driver named Takele Gobena, has publicly stumped for the Seattle ordinance. Gobena recently told The American Prospect that he regularly drives 55 hours or more a week for Uber and Lyft and still can't support himself. Last week, Puget Sound Sage, a progressive advocacy group in Seattle, put out a report arguing that the Seattle law would lead to a more stable workforce in the ride-for-hire business.
In an emailed statement to HuffPost, an Uber spokeswoman said the majority of the company's drivers have sources of income besides Uber.
"Uber is creating new opportunities for many people to earn a better living on their own time and their own terms," she wrote. "Drivers say that with flexible and independent work with Uber, 50% of them drive fewer than 10 hours a week, 70% have full-time or part-time work outside of Uber and 65% choose to vary the hours they drive 25% week-to-week."
Whether or not the Seattle legislation ultimately survives, it marks one of the most aggressive attempts by a government body to address Uber's business model since the company first upended the traditional taxi industry. The law underscores much larger questions about the modern workforce -- questions like who works for whom, and how independent are independent contractors.
Charlotte Garden, a professor at the Seattle University School of Law, noted that the Seattle legislation includes a couple of provisions that are far more worker-friendly than federal labor law. For one, the Seattle law allows workers to unionize if a majority of them submit representation cards to the company -- a process known as "card check" -- thereby bypassing a secret-ballot election. The Seattle law also allows drivers to sue in court if their collective bargaining rights are violated, a right not granted by federal law.
"I think one really great thing about the proposed Seattle ordinance is it takes away some of the incentive to misclassify drivers [as independent]," Garden said. "It seems like a sensible way to respond to [a] growing problem."
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