Uber still thinks the new legislation in Seattle that will create a union for Uber drivers is “unlawful,” but the company is nonetheless offering up advice to city administrators on how the rules should be implemented.
Uber Seattle General Manager Brooke Steger sent a letter last week to Fred Podesta, director of the city’s Finance and Administrative Services, outlining “four key principles” Uber believes should guide the city in how it enforces the recently-approved law.
In December, the Seattle City Council voted 8-0 to approve the first-of-its-kind legislation that creates a way for Uber, Lyft, and taxi drivers to unionize and gain benefits typically given to employees. Councilmember Mike O’Brien first introduced the bill as a way for drivers, who are classified as contractors, to combat income inequality and gain more benefits typically given to employees.
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.
The law has yet to take effect, and now Uber wants the city to follow four “core principles to ensure fairness in decisions that will impact the livelihood of thousands”:
- Every affected driver should have the right to vote.
- Every affected driver should be fully informed before voting.
- Every vote should be fairly counted.
- FAS should look to the National Labor Relations Board (NLRB) rules and case law.
“We look forward to engaging in the upcoming rulemaking to ensure that all drivers can make a fully informed choice about representation,” Steger noted.
Despite offering advice for crafting the rules, Uber wrote in the letter that it “continues to believe that the ordinance as enacted is unlawful under both state and federal law.”
“Nothing in this letter should be construed as a waiver by Uber of its right to challenge the ordinance; to the contrary, Uber expressly reserves its right to assert all of its claims and defenses against the City to the full extent authorized by federal and state law,” the company added as a footnote.
The city is well aware that litigation from companies like Uber and Lyft could be coming. Speaking in Seattle in December, 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.”
Earlier this month, O’Brien spoke at a Bia Kelsey conference about the on-demand industry and defended the law after a few audience members voiced concerns. He noted that drivers are being paid for less than in years past — uberX’s per-mile rates have dropped 50 percent since uberX launched in Seattle three years ago — and wants to make sure they have a voice.
“How do we allow the workers in this industry to have some voice and leverage?” O’Brien said. “The workers benefit when the market is expanding, when they have more customers — how can they share in the prosperity with Uber? Instead, what we have now is Uber valued at $63 billion and drivers that work full time making less than $3 an hour after deducting expenses. The playing field is so out of balance; the power dynamic is so out of balance.”
John Kirkwood, a law professor at Seattle University who also spoke at the event, noted “significant” problems with the legislation related to anti-trust issues.
“The state of Washington has allowed the City of Seattle to regulate the product market here for taxi services,” Kirkwood said. “But there’s no clear intent to displace competition in the labor market. The state of Washington has not clearly authorized Seattle to allow collective bargaining in the labor market.”
Seattle Mayor Ed Murray also voiced concerns and declined to sign the bill in December, citing “several flaws” including the burden of administering the law, but noted that it would still become law without his signature.
Last month, the U.S. Chamber of Commerce challenged the city’s decision to give drivers the right to unionize, saying it “violates federal law in at least two ways” and threatens to “burden innovation, increase prices, and reduce quality and services for consumers.”
We’ve reached out to O’Brien’s office for a response to the letter, and will update when we hear back.
You can see the full letter here: