Uber Wars: The Chamber Strikes Back

By: Ashtyn Hemendinger

In late 2015, Seattle approved legislation allowing unionization for workers of ride-hailing companies like Uber and Lyft.[1] The city council’s unanimous decision made Seattle the nation’s first city[2] to let these workers collectively bargain.[3] Council Member Mike O’Brien, the one responsible for this big change, proposed this legislation back in September with the hopes to create “a process by which a majority of independently contracted drivers working for the same company could choose to join a so-called driver representative organization to negotiate pay rates and other conditions of employment.”[4]

This legislation is another notch on labor activists’ belts in their fight for gig-economy workers,[5] especially after a ruling in California classified Uber’s drivers as employees and the U.S. Department of Labor’s Wage and Hour Division passed down guidance stating that most workers qualify as employees.[6]  However, this progress made for Uber drivers and other gig-economy workers may come to a screeching halt as roadblocks lie ahead.

In late February, the U.S. Chamber of Commerce (“Chamber”) brought suit against the city of Seattle over the collective bargaining law for Uber and Lyft drivers.[7]  The Chamber, a lobbying group representing more than three million businesses, wants a judge to suspend the law because they believe that if ordinances like this continue to pop up across the United States, communities will be prevented from growing and benefiting from the evolving economy.[8] As a result, prices will likely increase and there will have to be a reduced quality in service.[9]  The Chamber further argues that the legislation is preempted by federal law and violates antitrust law, thereby making it easier for drivers to get together and set rates, leaving the employers with no choice but to raise fares for consumers.[10]  Not only does this violate antitrust laws, but it also restricts the freedoms independent contractors.[11] For instance, by unionizing and participating in collective bargaining, independent contractors will no longer have the option of choosing how many hours they want to work, as the union will likely have maximum and minimum working hour requirements.[12]

While workers’ rights are important, is this legislation really worth the loss in flexibility for both drivers and passengers? Does the right to collectively bargain outweigh the damage to the gig economy business that could possibly result? The Chamber thinks so and hopes the court finds that Seattle is running afoul of federal afoul of federal laws.[13]

Until classification of these gig economy workers are solidified, issues such as these will continue to occur. Perhaps instead of trying to squeeze gig economy workers into one of these categories, it is time for Congress to create a new classification.  The chance of this happening any time soon, however, does not seem likely.[14]

[1] Kurt Orzeck, Seattle Becomes First US City to OK Unions For Uber Drivers, Law360 (Dec. 14, 2015), http://0-www.law360.com.libweb.hofstra.edu/articles/737846/seattle-becomes-first-us-city-to-ok-unions-for-uber-drivers.

[2] Id.  Seattle is leading the way in raising labor standards for workers. Id.  They were also the first major city to adopt the $15 minimum wage. Id.

[3] Id

[4] Aaron Vehling, Seattle Proposes Collective Bargaining Law for Cabdrivers, Law360 (Sept. 2, 2015), http://0-www.law360.com.libweb.hofstra.edu/articles/698369/seattle-proposes-collective-bargaining-law-for-cabdrivers.

[5] See, e.g., Nithin Coca, Can we build a humane alternative to Uber?, The Kernel (Feb. 28, 2016), http://kernelmag.dailydot.com/issue-sections/features-issue-sections/15961/uber-on-demand-humane-working-conditions/; Katie Unger, No Backspace: Workers Against NYC’s Growing ‘Gig Economy’, City Limits (Jan. 25, 2016), http://citylimits.org/2016/01/25/no-backspaceworkers-against-nycs-growing-gig-economy/.

[6] Erin Coe, Uber Ruling Puts Sharing Economy’s Business Model in Limbo, Law360 (June 24, 2015), http://0-www.law360.com.libweb.hofstra.edu/articles/671485/uber-ruling-puts-sharing-economy-s-business-model-in-limbo; Gabriel Arevalo, Driving Ms. Classification: Uber’s Possible Misclassification of Drivers, The LEJER (Nov. 8, 2015), https://thelejer.wordpress.com/2015/11/08/driving-ms-classification-ubers-possible-misclassification-of-drivers/.

[7] King 5, US Chamber sues over Seattle letting Uber, Lyft drivers unionize, Seattle Sun Times (Mar. 4, 2016), http://seattle.suntimes.com/sea-news/7/79/271872/us-chamber-sues-over-seattle-letting-uber-lyft-drivers-unionize.

[8] Phuong Le, Chamber sues over Seattle law letting Uber drivers unionize, Miami Herald (Mar. 3, 2016), http://www.miamiherald.com/news/business/article63921102.html.

[9] See id.

[10] Le, supra n. 8; Nick Statt,  US Chamber of Commerce is suing Seattle for letting Uber and Lyft unionize, The Verge (Mar. 3, 2016), http://www.theverge.com/2016/3/3/11158160/uber-lyft-unions-chamber-of-commerce-lawsuit.

[11] Id.

[12] See Stephanie Milot, Seattle Sued for Letting Lyft, Uber Drivers Unionize, PC Mag (Mar. 4, 2016), http://www.pcmag.com/article2/0,2817,2500325,00.asp.

[13] Id.

[14] See Jonathan Rosenblum, To Fight Back Against Companies Like Uber, Workers Need Organizing—Not Technocratic Fixes, In These Times (Jan. 19, 2016), http://inthesetimes.com/article/print/18787/GigEconomy-Workersrights-taxies-labor-Uber.

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