Uber Disrupts Organized Labor and a Union may get More Dues Paying Members

By F. Vincent Vernuccio

06/08/2016

While disrupting the car-for-hire industry with its ride-sharing app, Uber created a new level of job flexibility and choice for the people who drive for them, allowing drivers to set their own hours and essentially be their own bosses. And now, Uber is doing something similar to the standard union model.

In early May, Uber announced it had reached a deal with the International Association of Machinists District 15 to form the Independent Drivers Guild for New York City’s 35,000 Uber drivers.

What makes the Guild interesting is, although organized by a large labor union, it won’t look much like a typical union. The New York Times  reported that the Guild, “would establish a forum for regular dialogue and afford [workers] some limited benefits and protections — but that would stop short of unionization.”

The five-year agreement would allow members regular meetings with management, an appeals process for discipline and access to several benefits programs such as insurance and legal services.

Even though Guild members will meet with Uber, they will not be able to force Uber to bargain over contracts as a traditional union would. Further, no Uber driver will be required to pay dues to the Guild, as they otherwise would in a traditional union in New York. Uber drivers could still work directly with the company and would not need to go through the Guild if they wanted to negotiate with management or appeal a grievance on their own. 

The Guild and Uber will team up to lobby for a level playing field on taxi sales taxes. Currently New York state law charges a 9 percent sales tax on Uber rides but there is only a 50-cent surcharge on taxicabs.

According to Uber Chief Advisor David Plouffe, rides with Uber and taxis should be taxed at the same rate. “This would not only mean more money for drivers, it would also free up resources for a new benefits fund administered by the Guild and used to cover benefits such as paid time off or parental leave, for example.”

While the deal is not perfect, it shows the beginning of a model that could bring unionization into the 21st Century. It also signals that at least a few unions are taking seriously the new on-demand, independent contractor economy, which is likely to continue growing.

Starting with the good: almost all of the agreement between Uber and IAM is voluntary. The agreement does not force drivers to be represented by the union, nor does it compel the company to bargain, as is standard operating procedure with traditional unions. Instead, the agreement models a “members-only agreement,“ where a union in a workplace only represents the workers who choose to become members of the union.

As a result, Uber will work with IAM but is not legally required to do so. Rather, the company and the union will work together because it is in both of their own interest to do so. To the extent that the Guild helps make Uber a more attractive job opportunity, it will help the company gain better contractors, provide better services and best its competition.

Natalie Foster, cofounder of Peers.org, a company that provides portable health and life insurance and retirement options for workers in the sharing economy, highlighted in a piece for CNN.com the benefits and flexibility the Guild would provide Uber drivers. She says the arrangement has the “potential to be a critical step toward a 21st century safety net for American workers’ real lives today, because it could very well lead to a workable model to provide portable benefits to gig economy workers.”

The benefits of the deal for the union is that it gets the potential of dues-paying members (IAM is not charging fees for membership as of the announcement) and only has to provide services to workers who are members.

Not all unions are willing to adapt to the sharing economy and embrace the voluntary approach of the Guild. Bhairavi Desai, executive director of the New York Taxi Workers Alliance, told Reuters the deal was a “historic betrayal” of drivers since IAM gave up they type of mandatory association experienced by traditional unions. The Taxi Workers Alliance filed a class action lawsuit in Federal Court in New York on June 2nd to reclassify Uber drivers as employees as opposed to independent contractors.

But now for the bad in the deal: the Uber-IAM deal could open the door for compulsory funding of the union through this newly created union-controlled benefits fund.  If Uber and the Guild successfully lobby to reduce the sales tax on Uber rides, the union could fight to use part of the savings to fund itself though a mandated union benefits fund, rather than allow drivers to keep the extra earnings and choose whether or not to contribute.

Clearly the playing field should be level and taxis should not be given special tax benefits in comparison to Uber or any other private hire vehicles, so the arbitrary sales tax on Uber rides should be eliminated. But any savings should go to benefit drivers and they should decide if they’d like to use that extra income to pay into the Guild’s benefits fund.

Further, the new innovative Guild could be no more than a stalking horse for a traditional union.

Jim Conigliaro Jr, general counsel for the IAM District 15, has clearly stated that if Uber drivers are redefined as “employees,” his union would try to organize them into a traditional union.

Nevertheless, the IAM and Uber coming to a voluntary agreement to provide optional benefits for drivers suggests the potential start of a positive transition for the labor movement. The voluntary agreement shows that unions no longer need to compel employers and employees into accepting forced representation and paying forced dues in order to support themselves. And if successful, this deal would demonstrate that unions do not need to use legislative and regulatory action to reclassify independent contractor and small business owners into a one-size-fits-all category they can then organize for the purpose of collecting dues.

If there are no ulterior motives to force unwanted representation on Uber drivers, and the plan is simply to provide a service that drivers can accept or reject then, except for the possibility of forcing drivers to contribute to an IAM controlled benefits fund the agreement between Uber and IAM should be applauded.

Uber Deal Shows Divide in Labor's Drive for Role in 'Gig Economy'

by  Reuters 

MAY 23, 2016

The International Association of Machinists and Aerospace Workers trumpeted an agreement reached earlier this month to represent New York Uber drivers, saying it “gives organized labor an opportunity to shape the new economy in a way that supports and values workers and their families.”

But not everyone in the U.S. labor movement is cheering.

The deal falls short of actual union representation, and it has revealed sharp divisions among labor advocates about how to address a central reality of the so-called gig economy: The classification of workers as independent contractors rather than employees.

Under the terms of its agreement with Uber Technologies Inc, the Machinists will form an “Independent Drivers Guild” that will be able to intervene with the company on behalf of wrongly terminated drivers and negotiate for benefits, such as disability insurance and roadside assistance.

The Machinists also agreed to refrain for five years from organizing strikes or unionizing drivers and said they would not push regulators to change the status of drivers from contractors to employees.

Bhairavi Desai, executive director of the New York Taxi Workers Alliance, decried the deal as a “historic betrayal” of drivers because it gives up their most important tools to achieve economic power.

She said her organization had been in talks with the Machinists about collaborating on a driver unionization campaign before the agreement with Uber. The Machinists had successfully organized car service drivers in the past, and Desai said her group believed a similar path would work with Uber drivers.

Jim Conigliaro Jr, general counsel for Machinists Union District 15, said the agreement can help Uber drivers earn more money and work under better conditions in the short term. Longer term, if the National Labor Relations Board were to rule that drivers should be classified as employees, then a unionization drive would be possible.

“To us this deal is the best of both worlds,” Conigliaro said.

Rideshare companies say contracting, rather than employing, workers keeps costs down and provides the flexibility drivers say they want.

But contract workers are not entitled to the same legal protections employees enjoy, including minimum wage guarantees and overtime pay.

Organized labor has struggled with how to react with the new realities of the rapidly growing part of the economy dominated by gig, or temporary and contract, workers. Some union officials have argued it’s crucial to engage in new ways with the changing nature of labor, while others have doubled down on traditional organizing.

“We desperately need risk-taking innovation in search of the next model,” said Service Employees International Union (SEIU) vice president David Rolf.

Traditional collective bargaining does not work with on-demand tech companies, but new models, such as the Uber deal, can introduce worker organizing, he said.

Last month, the SEIU drew flack from another union, Unite Here, for negotiating with internet-based home rental company Airbnb Inc to encourage its hosts to hire union-approved house cleaners who would make at least $15 an hour.

The deal was abandoned after Unite Here, which represents hotel workers, attacked the arrangement as “cheap cover” for Airbnb.

“We are appalled by reports that SEIU is partnering with Airbnb,” Unite Here spokeswoman Annemarie Strassel said at the time. She accused the rental service of “driving up housing costs and killing good hotel jobs in urban markets across North America.”

Seth Harris, a Washington D.C. lawyer who was deputy U.S. labor secretary from 2009 to 2013, said both unions and companies like Uber are formulating strategies for the new labor market in the face of outmoded labor and antitrust laws that restrict their options.

“Both sides are hemmed in, so they have found a way to navigate the narrow path those laws have carved for them,” Harris said.

The Machinists are not the only union to engage with Uber drivers. Earlier this year, the International Brotherhood of Electrical Workers launched a campaign to represent 600 of the company’s drivers at New York City’s LaGuardia Airport. The union, which like the Machinists is affiliated with the AFL-CIO, backed off after the Machinists launched their drive.

Last month, Uber agreed to settle a lawsuit brought by California and Massachusetts drivers for up to $100 million. Drivers would remain independent contractors under the deal, but Uber said it would help establish an association for them to communicate with the company.

The next day the Teamsters, in conjunction with worker rights group Silicon Valley Rising, announced it would launch a driver association in California. Kara Deniz, a spokeswoman for the International Teamsters, said it is difficult to predict what kind of organization will ultimately be formed.

“As a union whatever we do will be based on discussions with the drivers and their wishes,” Deniz said.

The Machinists’ deal could make it difficult for other labor groups to take a harder line with Uber, unless drivers are united and clear in their demands, said Catherine Fisk, a labor law professor at the University of California Irvine.

“In the end what any worker organization can get is a function of the solidarity of the workers,” she said.

In Seattle, Uber and Lyft drivers worked with the Teamsters to lobby officials for an ordinance allowing them to bargain collectively. The U.S. Chamber of Commerce filed a lawsuit to block it, which is pending.

Fasil Teka, an Uber driver who helped found the App Based Driver Association in Seattle, said collective bargaining – and the ability to strike – was his main reason for organizing.

Otherwise, he said, “there would be no point in having a union.”

The one thing all sides agree on is that the struggle over how to organize labor in the new economy is just beginning, and for some observers, that’s not a terrible thing.

“Unions are in a state of crisis and are desperately trying to figure out a model to stay relevant,” said Phil Wilson, president of the Labor Relations Institute Inc, which casts itself as “the preeminent firm in countering union organizing campaigns.”

Uber’s Quasi Union Could Be a Faustian Bargain for Drivers

By Sarah Kaine and Emmanuel Josserand 

05/17/16 

Two class actions brought by drivers against ride-sharing company Uber in California and Massachusetts have been settled, with the drivers agreeing to remain “independent contractors”. Uber will make US$100 million in payments to those involved in the case.

The question of whether the Uber drivers were contractors or employees was at the heart of the legal action. It is significant because employee status brings job security, legal protections and other benefits not applicable to contractors.

Uber had been fiercely fighting the action on the basis that it merely provides an “app” and as such does not have an employment relationship with drivers.

So, despite the settlement costing up to US$100 million, the outcome could be characterized as a win for Uber, particularly when you consider the agreement potentially saved it more than $700 million.

This “win” will not be a surprise for Uber watchers as the company has tenaciously prosecuted its growth strategy, led by the “take no prisoners” swagger of CEO Travis Kalanick. What is surprising is that as part of the settlement Uber agreed to help create and fund a driver’s association.

The status of that association (the Independent Driving Guild) is ambiguous. It is funded by Uber but purportedly “fighting for Uber drivers”. The Guild states that its purpose is to “protect, support and connect workers in the sharing economy”.

That the Guild is company sponsored evokes parallels with “yellow” or company unions that sprung up in the US in the 1930s as an attempt to circumvent the labour provisions of Roosevelt’s New Deal.

An article published in the Michigan law review in 1940 investigating the incidence of company unions during the New Deal era noted that such company unions tend to form at a time when “an outside union is making headway”.

That “company unions” were subsequently restricted under US federal labour law (the National Labor Relations Act), with specific prohibitions on company attempts to “dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it” and they may not “establish and control a “company union”, suggests that such business-sponsored unions were seen as an active obstruction of authentic worker representation.

This is further reflected in ILO convention 98, Article 2 (1949) that expressly addresses the issue of company unions and deems as inappropriate any:

“…acts which are designed to promote the establishment of workers’ organizations under the domination of employers or employers’ organizations, or to support workers’ organizations by financial or other means, with the object of placing such organizations under the control of employers or employers’ organizations.”

The parallel with Uber’s approach to the emerging groups of drivers across the world, including Australia, is obvious. With class actions active in all states in the US except for the two that have settled, the collective voice of drivers was starting to pose a threat to the company’s business model. In such a situation, a quasi-union funded by the company with a guarantee that the status of drivers will not be changed is an adroit manoeuvre – even if there is a marginal cost to sweeten the deal.

Is such a circumscribed voice serving the best interests of drivers? The history of company unions suggests not, as does the lack of consensus between the Guild and the rival Uber Drivers Network, which claims 5000 members.

Dealing with market disruption in a balanced way certainly requires rethinking how workers are represented in a fragmented economy. In that sense, it is important to look beyond corporate maneuvering. The emergence of the Guild could represent a number of things to unions, Uber and the actors in a fragmented economy:

 * the adaptation of unions to new forms of representation in the “sharing economy” and among workers who fall outside the traditional protections of labour law and union coverage

 * a Faustian bargain by unions in which they trade off authentic representative power in order to maintain a vestige of relevance in the new economy

 * a genuine attempt by Uber to engage with its drivers

 * a “back to the 1930s” moment in which a company facing a threat from discontented workers on the cusp of organizing, initiates a “company” union.

New forms of collectivism are to be expected as circumstances change and it may be that the ephemeral nature of relations between participants in the “sharing economy” does not sit comfortably with traditional representative structures. What history has taught us though, is that ensuring fairness when dealing with multinational corporations requires long-term institutionalization and independence. While the Guild has gained some form of institutionalization, its independence is certainly compromised.

Uber and Union Agree to Form Drivers Guild in New York City

By Jing Cao  

Eric Newcomer

May 10, 2016

Uber Technologies Inc. agreed to start a guild for 35,000 drivers in New York that will help them negotiate with the ride-hailing company, though the group will have less power to resolve disputes than a full-fledged union.

All current and future Uber drivers in New York City will be represented by the Independent Drivers Guild, a newly created affiliate of the International Association of Machinists District 15, according to a statement from the union. Under terms of the five-year contract with Uber, drivers will have a more unified voice to lobby locally and to negotiate with the San Francisco-based company.

“The guild is the first of its kind,” James Conigliaro Jr., the founder of the Independent Drivers Guild, said on a conference call following the announcement. “Drivers need immediate support, and we truly believed it was our responsibility to create a structure to help independent drivers in New York.”

With more than $10 billion in capital raised to fund global expansion of its service, Uber has faced push-back from regulators and drivers, while dealing with lawsuits and challenges for workers to organize and receive employee status. In December, Seattle became the first city in the country to allow drivers for ride-hailing services to form unions, prompting the U.S. Chamber of Commerce to sue the city. 

Uber recently agreed to settle a class-action lawsuit brought by drivers in Massachusetts and California. Uber agreed to pay up to $100 million as part of the settlement. The company held firm on its argument that drivers are independent contractors and therefore are not entitled to benefits, such as paid sick days and Social Security benefits.

The arrangement in New York could become a model for other states, said Mario Cilento, New York state president of the American Federation of Labor and Congress of Industrial Organizations, the largest trade union association.

“A lot of what we do in New York sets a tone for the rest of the country,” Cilento said. “I’m sure that other unions in other states are going to take a look at this.”

The New York guild’s power to resolve some of drivers’ main gripes with Uber is limited. The group, which is partially funded by Uber, won’t be able to turn to the National Labor Relations Board, for instance, to intervene on issues. The guild will have little power to negotiate over fares. Independent contractors are legally prohibited from collectively bargaining.

Conigliaro said the union had previously tried other structures to give drivers a voice but that it ultimately decided a new framework was necessary. The union began discussions with Uber in late 2015, according to the statement. “The formation of this guild provides the best structure to drivers in the industry,” Conigliaro said.

According to terms of the agreement, Uber’s management will hold monthly meetings with drivers. The workers will also have access to discounted benefits, including life and disability insurance, roadside assistance and education. Drivers in the city who get banned by Uber, known as “deactivation,” will also have the ability to appeal some of these decisions and can request guild representation during the process.

Harry Campbell, who runs a popular blog for Uber drivers, said there are more pressing issues on drivers’ minds. “Right off the top of my head, I can think of three things more important to drivers than the deactivation policy,” he said. Low fares, how much Uber takes from those fares and the ability to receive tips through the app are among the main concerns.

Campbell also questioned the guild’s independence. Matt Kallman, a spokesman for Uber, declined to say how much Uber would be paying to support the group. The International Association of Machinists will foot some of the administrative and other costs, Kallman said. Drivers will not be required to pay dues to join the group, he said.

Helping establish a guild is a savvy decision by Uber, said Arun Sundararajan, a professor at New York University’s business school who’s writing a book titled “The Sharing Economy.” “They’re nurturing their relationship with their drivers,” he said. “It seems like a smart move.”

Uber emphasized that the new organization could help the company better communicate with drivers. “Communication is important,” said David Plouffe, Uber’s chief adviser and a former senior adviser to President Barack Obama. “On price cuts, we haven’t always had the best forum to discuss and share data -- how price cuts work, what we see afterward.”

The guild and Uber said they will work together to lobby for the company to reduce the taxes it pays in New York, bringing them more in line with those for taxis and private for-hire drivers. If successful, the company’s savings would be passed onto the guild and to drivers, Uber said. Under the agreement, the guild would set up a benefits fund that would provide drivers with paid time off, retirement savings accounts or other benefits.

A Union Turf War Is Snuffing Out The Campaign To Organize Uber Drivers At LaGuardia Airport

Cole Stangler

02/11/16

The International Brotherhood of Electrical Workers (IBEW) stunned the tech world last week when it filed for a federally supervised election to represent 600 Uber drivers at New York City’s LaGuardia Airport. If successful, it would be the first federally recognized union at the popular ride-hailing company. Now, the campaign has hit a major setback — and from an unlikely source: another labor union.

The nation’s largest labor federation, the AFL-CIO, Monday successfully asked the National Labor Relations Board (NLRB) to delay election proceedings at Uber. The move came after another of its member unions, the International Association of Machinists and Aerospace Workers (IAM), raised objections under the federation’s jurisdiction rules. The Machinists union counts 10,000 black car drivers, including more than 1,000 Uber drivers, in what it describes as a broad network of supporters across New York City. It also directly represents about 200 black car drivers at a Long Island company after winning an election in 2012.

James Conigliaro, general vice president of the Machinists, insists there’s no turf war. He says the election petition at LaGuardia risked damaging the labor movement’s long-term goals of lifting pay and working standards at Uber.

“It has to be thought out a little bit more and there has to be a plan,” Conigliaro says. “We need to figure out how to help these drivers and running to the National Labor Relations Board with a few hundred cards to organize a multibillion-dollar company we don’t believe is the right approach. This isn’t about turf, it’s not about jurisdiction, it’s all about the drivers and figuring out the right strategy for them in the labor movement.”

Conigliaro says organized labor needs to better plot out its approach to Uber before unions file for elections. He pointed to the example of Seattle, which recently approved a controversial plan that allows Uber and Lyft drivers to form citywide labor associations and bargain directly with the companies. He also mentioned the possibility of a legislative approach, involving new regulations on fares and driver caps. Conigliaro says traditional unions overseen by the NLRB could work too, but he raised concerns over the size and scope of the bargaining unit proposed at LaGuardia. Those workers represent just a fraction of the roughly 30,000 Uber drivers across New York City.

Conigliaro also worries the small Westchester County, New York, local that filed for the election, Local 1430 of the IBEW, is not equipped to handle the backlash from Uber. Before an election can proceed, the NLRB must determine drivers are employees, not independent contractors as the company maintains. Many say that distinction is integral to the company’s business model, which cuts out expenses like minimum wage and overtime. Uber is already facing a major federal class action suit on the matter from drivers in California.

In response to the IBEW petition at LaGuardia, Uber has retained the services of Littler Mendelson, one of the nation’s top law firms for union avoidance — or in labor movement parlance, “union busting.”

The decision over whether Uber drivers are employees “is going to have an absolute effect on the whole country and I think we have to be prepared for that,” Conigliaro says. “We have to have the resources for that, when you’re going up against a company as big as Uber, who’s already hired a law firm that’s notorious for fighting back union campaigns. You have to imagine that they’re going to throw a lot of money into [this] to try and defend themselves.”

A potential ruling that says Uber drivers are not employees could hinder future efforts to organize them in New York City and elsewhere, Conigliaro says.

“Nothing against the IBEW. We support each other,” he continues. “We all have the right goal in mind to help these drivers, but the purpose of this is really to just get a delay so we can all sit together in a friendly atmosphere, a working atmosphere, and figure out what’s best for the drivers.”

That’s not the way that Jordan El-Hag, business manager for IBEW Local 1430, sees it. He believes it’s “100 percent” a dispute over jurisdiction; in other words, that the Machinists feel like his chippy, organizing-focused local stepped onto IAM turf.

“To be honest, it’s somewhat of a surprise,” he says. “There’s been no presence of Machinists among drivers we’ve talked to.”

El-Hag rejects the notion the AFL-CIO’s request for a delay in the election amounts to a friendly gesture. He says he never heard from anyone at the Machinists before the union requested the delay and only learned about it from the NLRB itself.

He also brushes aside the charge that his local is unprepared to take on mighty Uber.

“There’s plenty of NLRB precedent where cab drivers are determined to be employees,” he says. “It’s not really that complicated of an analysis. Uber’s a big company, it’s a new tech company, it’s interesting, but it’s not that alien an issue to litigate.”

Last week, Wilma Liebman, the former chairwoman of the NLRB under President Obama, told International Business Times she believes there’s “a strong argument to be made that [Uber drivers] are employees.”

El-Hag also blasted the notion the proposed election at LaGuardia damages labor’s long-term vision of improving standards at Uber — whether it ultimately takes the form of organizing drivers under the purview of the NLRB, passing legislation to lift fares or putting public pressure on the company to bargain.

To the contrary, he says it would bring some much-needed clarity.

“You can’t develop a strategy unless you know what the status of these employees is,” El-Hag says. “We looked at the situation and said, ‘What is the most likely way we can get a success here, carving out the smallest unit, answering those legal questions and setting a good precedent.’ ”

“They might lose at the labor board, they might lose in [the federal class action lawsuit in] California, but that will help you determine the right path to take,” he continues. “These legal issues have to be determined before you can develop a strategy.”

“You can’t have a strategy of, ‘Well, we’re not sure if we’ll take a traditional NLRB approach,’ ” El-Hag says. “You don’t know if you can take an NLRB approach because you don’t know whether or not they’re employees. You don’t know what the company’s going to say in response, what their defenses are going to be. You don’t know how the board is going to view the bargaining unit that’s going to be constructed.”

The NLRB has agreed to delay proceedings for 40 days while the AFL-CIO sorts out the dispute between the Machinists and IBEW. If the unions can’t come to an agreement by themselves, the case will go to an independent arbitrator.

El-Hag says he isn’t sure how things will proceed. “I think it’s somewhat of an opportunity lost,” he says.

Uber has faced mounting criticism over its labor practices. The company's decision to decrease fares earlier this year fueled drivers’ support for the union at LaGuardia Airport, El-Hag said. The move also sparked separate protests in New York City and San Francisco.

Seattle becomes first U.S. city to let Uber drivers unionize

Seattle may soon become the first city to let drivers of ride-hailing companies such as Uber and Lyft collectively bargain over pay and working conditions (12/13 11p).

Greg Toppo and Elizabeth Weise, USATODAY 12:27 a.m. EST December 15, 2015

(Photo: KING5-Seattle)

Seattle on Monday became the first U.S. city to allow drivers of ride-hailing companies such as Uber and Lyft to unionize over pay and working conditions, a decision that will almost certainly be challenged in court and has already met resistance from the city's mayor.

The city council's vote was unanimous at 8-0. Seattle Mayor Ed Murray said late Monday he does not plan to sign the bill, though it can still become law without his signature.

Under the new ordinance, companies would be required to give the city a list of its Seattle drivers. A nonprofit organization like a union would use the list to contact drivers and work to gain the support of a majority of a company’s drivers to be designated as their bargaining representative.

Uber and Lyft strongly opposed the ordinance and were expected to challenge it in court. David Plouffe, a former political strategist for President Obama who now serves as an adviser to Uber, visited Seattle earlier this month to promote the company and criticize the ordinance, The Seattle Times reported.

The company has also sued King County and the Seattle law firm Keller Rohrback in an attempt to block the county from releasing the number of licensed drivers the company has citywide.

Jessica Santillo, an Uber spokesperson, said the company "is creating new opportunities for many people to earn a better living on their own time and their own terms." She noted that half 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 week-to-week.

Lyft spokeswoman Paige Thelen said the ordinance "threatens the privacy of drivers, imposes substantial costs on passengers and the city and conflicts with longstanding federal law."

ANTITRUST LAWS

John Kirkwood, a professor of antitrust law at Seattle University’s law school, told USA TODAY the city council may have overstepped itself in Monday's vote. Only states, not cities, are allowed to “replace market competition with state regulation,” by allowing collective bargaining, he said.

The attempt to allow Uber and Lyft drivers to unionize would violate antitrust laws unless it satisfied that state action exemption, he said.

He also said states that have allowed collective bargaining are required to supervise both the process of that bargaining and the results. The Seattle ordinance includes language covering the bargaining process, but not the outcomes. There’s nothing in the ordinance about oversight of the possible impacts union bargaining might have on the general public, such as higher prices, Kirkwood said.

“That’s required,” he said.

Mayor Murray cited these concerns in an online statement after the vote. The ordinance includes "several flaws, especially related to the relatively unknown costs of administering the collective bargaining process and the burden of significant rulemaking the Council has placed on City staff," he wrote. "I said consistently during this debate that I support the right of workers to organize to create a fair and just workplace."

Seattle has led several U.S. cities on workers’ rights issues, such as gradually raising the minimum wage to $15 and requiring most employers to provide paid sick leave. Council member Mike O’Brien, who introduced the bill, said Monday's vote was the next step in economic justice for workers.

Many drivers in Seattle are immigrants who depend on full-time work, but some make less than minimum wage and lack basic worker rights such as sick leave and protection from retaliation, he said. Labor activists have complained that app-based services such as Uber and Lyft make it easier for companies to contract with independent workers and avoid paying minimum wages and benefits.

O’Brien’s proposal grew from organizing by taxi, Uber and Lyft drivers in Seattle and from advocacy by Teamsters Local 117, The Times reported. Some Uber and Lyft drivers have said that after expenses they make far less than the city’s minimum wage. While others have said they like the system as it works, at least 1,000 drivers have already organized as part of the App-Based Drivers Association, Reuters reported. Many have said they struggle to make a living, with some earning less than $3 per hour after expenses.

On its website, the association said drivers for companies like Uber and Lyft "have no say over their working conditions" and are "routinely and arbitrarily disconnected from their apps without warning or explanation." It also said driver pay has dropped radically as competitors slash their pricing in an effort to undercut competition. "Drivers make huge investments in their businesses but have no job security and no place to voice their concerns," it said.

In a statement, Teamsters Local Union 117 celebrated the vote, calling it "a turning point toward greater protections for workers in a changing economic landscape."

“By giving us rights, this law will help all of the drivers and also help our communities,” said Peter Kuel, an Uber driver and member of the leadership council of the App-Based Drivers Association.

Uber operates in more than 300 cities in 67 countries and has raised more than $10 billion from investors. Its war chest has helped fund legal and regulatory battles worldwide, as well as lobbying efforts at state and national levels.

Contributing: The Associated Press. 

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