The Seattle City Council today unanimously passed legislation that gives Uber, Lyft, taxi and other “for-hire” drivers the right to unionize — the first such law in the nation.
The ordinance, which still needs a signature from Mayor Ed Murray, gives drivers the ability to negotiate pay rates and employment conditions. Currently, these drivers are considered independent contractors and are not protected by traditional labor standards — including Seattle’s new $15 per hour minimum wage law. They also do not have collective bargaining rights covered by the National Labor Relations Act.
However, this legislation, first introduced by councilmember Mike O’Brien, creates a way for drivers to gain benefits typically given to employees.
“The intent of this legislation is to frankly create a regulatory environment where innovation can continue to happen, but not at expense of the workers,” O’Brien said today at City Hall, where several supporters of his bill cheered when the council approved it with an 8-0 vote.
During the public comment portion of today’s meeting, one man said “we shouldn’t let tech companies undermine progress we’ve made against income inequality in Seattle.”
O’Brien’s unique plan is to let drivers that have a minimum threshold of trips join a “Driver Representative” organization that would then allow them to negotiate pay rates and employment conditions. These organizations would have 120 days to demonstrate that “a majority of drivers for a specific company choose to be represented.” From there, they would be able to participate in collective bargaining conversations on behalf of their drivers.
“This is an example of legislation that allows our economy and our community to continue to evolve and innovate, but insures that as we do that, we do it in a way that’s not a race to the bottom that benefits few, but rather we do it in a way that sustains the whole community and lifts everyone up — especially those that are at the bottom who need access to opportunities,” O’Brien said today. “I firmly believe that this legislation is a great step in that direction.”
All eight councilmembers at City Hall on Monday approved the new legislation, more than a year after Seattle lawmakers created regulations for “transportation network companies” like Uber and Lyft. Councilmember Kshama Sawant called it a “historic step toward offering collective bargaining rights for otherwise precarious workers.”
“Any councilmember who votes ‘no’ on this will clearly be saying that they care more about profits of a multibillion-dollar company than rights of Seattle workers,” Sawant said.
New councilmember Lorena Gonzalez said she understands the importance for low-wage workers to have a voice.
“This is good policy for our city,” she said. “I ask all of us to ask ourselves: Do we want to use the law as a shield, or do we want to use it as a sword? I say, use it as a sword.”
Teamsters Local 117, an organization that represents taxi drivers and unions across the Puget Sound region, helped create the “App-Based Drivers’ Association” earlier this year for drivers who were frustrated with how they were treated by Uber and Lyft. Teamsters Local 117 Business Representative Dawn Gearhart was pleased with Monday’s unanimous vote, calling it the “next logical step to support working people” in Seattle.
“In the bigger picture, even though workers are classified as independent contractors or outside of traditional employment, governments and other workers are actually recognizing that they still need protection at work and they still need a say,” Gearhart told GeekWire.
Gearhart added that drivers like the flexibility of working when you want, which is what companies like Uber and Lyft tout as a reason for classifying workers as independent contractors versus employees — in exchange, they don’t offer benefits often provided to employees of traditional private companies.
But she said the definition of “flexibility” has changed since the companies first began operating in Seattle.
“A lot of drivers have to now work 12 hours to make the same amount they used to make in eight,” she said. “That really cuts into their flexibility. They aren’t able to take a second job or spend time with their family because instead, they are spending more time on the road trying to supplement the income they lost from these companies.”
“There’s always this talk of, if you don’t like it, quit,” Creery told GeekWire. “My attitude is that, that’s the lazy route to go. I drove at a time when pay was better, and I know it can be better now. It’s not better for a simple choice: To impose these non-competitive rates on the industry in an attempt to attain monopolization.”
Added Creery: “Civil society rejects monopolization. Instead of walking away from this, I would prefer to stay within it and try improve it.”
Creery noted that there will be “undoubtedly” be litigation from companies like Uber and Lyft.
“Going forward, it’s going to be a lot of work,” he said. “If they choose litigation, it will be a long route.”
Litigation is certainly not out of the realm, at least from Uber’s side. Speaking in Seattle earlier this month, Uber strategic policy advisor David Plouffe called the ordinance “puzzling,” and warned that it may cost the city some money.
“I think the ordinance is puzzling because it’s generally believed to be flatly illegal, and I assume the courts will look at that if it were to be successful,” Plouffe said. “My understanding is that a couple councilmembers here also asked the Federal Trade Commission to look at this, as they had some concerns about the anticompetitive behavior that this ordinance might be suggesting.”
Plouffe added: “At end of the day, we don’t think it makes a lot of sense and could be something that costs the city a lot of money.”
Seattle Councilmember Tom Rassmussen said today that “everyone expects this ordinance to be challenged in court.”
“But to me, that’s the cost of seeking innovative policies that addresses issues like income inequality and working conditions,” he said. “Seattle has often led the way with innovative policies. If this City Council or previous ones were to be discouraged from enacting reform legislation because of the threats of lawsuits, we wouldn’t have our early housing laws back in the 1960s, laws protecting the LGBT community from discrimination, the $15 minimum wage, or the mandatory sick leave ordinance.”
Uber and Lyft have dealt with lawsuits and pressure from workers rights advocates over the past few years who contend that drivers should be classified as employees, not contractors. But the companies, which have both dropped ride rates for passengers in past few years, maintain that their service gives drivers flexibility to work when they want — in exchange, they lack benefits often provided to employees of traditional private companies.
Just last week, a federal judge expanded a class-action lawsuit by California Uber drivers looking to establish themselves as employees. In response, Uber sent all of its U.S. drivers a legal agreement that would let them opt-out of future class-action lawsuits, the San Francisco Chronicle reported.
There are others who aren’t too thrilled with the approved legislation, either. Eastside for Hire General Manager Sam Guled called the vote “unfortunate” and said the city has stepped out of its local regulatory authority.
Guled added that “unions have been a negative force in this industry,” noting that they “divide our community.”
“The people who are celebrating today are the taxi owners of Yellow Cab and other taxis, because that’s basically who Teamsters really work for,” Guled told GeekWire. “And this isn’t just about Uber. It actually affects us small companies. It’s unfortunate the council was misled in a way that makes them think they’ve done something for drivers, when in fact, they haven’t.”
Guled said there are other options city lawmakers can take to help level the playing field and offer drivers more rights without creating unions, like adding taxi licenses or helping lower the cost of insurance.
Abdul Yusuf, another Eastside for Hire manager, said that “our community has enjoyed the status of independent contractor for many years.”
“I don’t think this legislation will ever take effect and we’ll oppose it all the way through,” added Yusuf.
We were at the City Council meeting live-blogging the proceedings and you can follow along below for more details. Here are statements from Uber and Lyft:
“Uber is creating new opportunities for many people to earn a better living on their own time and their own terms. 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.” — Uber spokesperson
“Lyft provides consumers with convenient and affordable transportation, and drivers with the ability to make money in their free time. Lyft drivers are entirely in control of where or when they work, and this flexibility is exactly why the service is so popular with with people looking to make extra income. Unfortunately, the ordinance passed today threatens the privacy of drivers, imposes substantial costs on passengers and the City, and conflicts with longstanding federal law. We urge the Mayor and full Council to reconsider this legislation and listen to the voices of their constituents who choose to drive with Lyft because of the flexible economic opportunity it offers.” — Lyft spokesperson