It’s a big day for Uber and Lyft drivers in Seattle — and those that think they should be protected by labor laws.
The Seattle City Council will vote later this afternoon on legislation that offers Uber, Lyft, taxi and other “for-hire” drivers the right to unionize.
Councilmember Mike O’Brien introduced the ordinance in September as a way to give drivers the ability to negotiate pay rates and employment conditions.
Since these drivers are considered independent contractors and not employees, they are not protected by traditional labor standards — including Seattle’s new $15 per hour minimum wage law — and do not have collective bargaining rights covered by the National Labor Relations Act. Taxi drivers have instead traditionally used groups like Teamsters to lobby the lawmakers that set regulations.
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.
O’Brien outlined parts of the plan in late August, noting that “too many drivers this industry are unable to earn a living wage, or even the minimum wage.”
“A business model that controls all aspects of these drivers work but relies on the drivers being classified as independent contractors undermines Seattle’s efforts to address income inequality and create opportunities for all workers in this city to earn a living wage,” the city notes.
This first-of-its-kind legislation is garnering worldwide attention, from local radio stations in Seattle to The New York Times who are all watching to see how this plays out and what it could mean for the business model of companies like Uber.
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.
Speaking in Seattle earlier this month, Uber strategic policy advisor David Plouffe called O’Brien’s ordinance “puzzling,” and one that may cost the city some money if approved by councilmembers.
“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.”
In a guest post on GeekWire, Megan Schrader, the executive director for TechNet in the Northwest Region, wrote that the City of Seattle should “not unilaterally impose burdensome rules on emerging industries and business models.”
“If adopted, this ordinance would set a troubling national precedent, and would stifle the growth of the gig economy workforce,” Schrader wrote. “Instead, we should be looking for ways to support and encourage this industry to grow.”
We’ll be reporting live from City Hall later today, so check back to this post for live updates.
Update: Here’s a new statement from Uber:
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 percent of them drive fewer than 10 hours a week, 70 percent have full-time or part-time work outside of Uber and 65 percent choose to vary the hours they drive 25 percent week-to-week.