Trump Administration Takes on the Uber Drivers Union


(Bick Bhangoo) #1

Yes, it's a fact, Uber drivers have a union, it's in Seattle and is the first and only union of drivers in the US. This was made possible by the City of Seattle, and it has come under fire ever since.

While the drivers might be having a gala night every night there, their party days might be over before they can do anything with their new-found power. The U.S. Chamber of Commerce has joined forces with the Trump Administration and Uber to fight this alleged "illegal" status in the State of Washington.

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The case of Chamber of Commerce v. The city of Seattle is being discussed in the 9th Circuit of Appeals. Uber is supporting this case and will provide the Chamber of Commerce with all the resources to combat the issue of an antitrust violation. The case started when the City of Seattle decided to get involved in an area that was not in their jurisdiction; they allowed Uber drivers, who are all independent contractors by joint agreement, to unify. Independent contractors by definition of labor and anti-trust laws cannot unify since this would lead to price setting, and that is illegal.

Uber received a big boost recently when the U.S. Department of Justice and the Federal Trade Commission gave support to the Chamber of Commerce through Trump's direct involvement. These two newcomers both provided arguments to the three-judge panel and are fighting the City of Seattle's claim that they should be able to set their own labor rules.

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The appeal came after a two-year battle between Uber and the City of Seattle and comes after years of Uberization of gig economies. This Uberization is how Uber managed to create a new employment construct, where car-owning residents can drive for income, much like a taxi driver, but without the regulations of taxi driving. Uber is also famous for its steamrolling over local rules and regulations and in some cases even state and federal laws to get its sites set up. This history of disregard for law and order is partially why the City of Seattle reacted the way it did.

The past problems were a direct result of how the founder and ex CEO of Uber, Travis Kalanick would operate. His demise came after sexual harassment allegations caused a shareholder rift that ousted Kalanick from control. Now, Uber CEO Dara Khosrowshahi has to deal with all the fallout, including the issue of an Uber driver's union in Seattle.

Seattle Vs. Uber, or How to help the little people

What Seattle is doing is not unionizing the drivers, it is trying to create a hybrid, where it does not recognize the drivers as employs of Uber, but as independent contractors do recognize their need to receive some basic benefits. This hybrid comes in lieu of the change in how the to insist it is viewed and operated by Uber. In retrospect, what the City of Seattle is doing, is creating a new set of regulations to meet the new type of business Uber has introduced into the market. The regulations that Seattle want to introduce don't cover all the drivers, it only covers full-time drivers, which means that not all Uber drivers will be covered by the new unification process. However, this still gives the drivers some control over pricing, and as such, could be considered a cartel. This is how Uber is fighting the regulations and is the core of what the Chamber of Commerce is basing its claims. What doesn't help the City of Seattle is that the Teamsters are the union standing behind the city, and as such, are already considered by many in Trumps administration as a dangerous force that can subvert the industrialization of the new gig economy.

Uber has been quick to combat the new Seattle law and set in motion a number of initiatives to alienate the drivers behind the law. The actions include a massive PR campaign, providing free pizza for drivers that would support the anti-union campaign and also invested in local TV and media coverage.

No Ruling – No Union

So long as the court debates the case, the drivers' union cannot act, and as such, is only a union in name and not inactivity.

This might continue for some time since the case is actually a very important one, and the decisions reached in the court of appeals will have an effect on Federal and other State laws, using the decision from this case as a basis for all future cases. The Seattle case is hinged on a Washington state transportation law from the 1990s, which was set up to regulate the for-hire vehicle industry, which was before ridesharing even existed. The "old" law gives a city the power to regulate drivers and companies. Uber claims that the old law does not include rideshare operations within its definitions and is, therefore, an infringement on the anti-trust law, which is basically giving the drivers a right to decide the prices and fees of the company, a cartelization of the system. The city disagrees with Uber's classification and claims that the law falls under a "state-action exemption" which is a legal standard that local governments can enforce when considering anti-competitive situations that can improve the status of employees and customers.

Lobby and Money = Results

Uber reached its current regulatory state around the country by investing heavily in lobbyists, for local, state, and federal effectivity. In a recent report that was prepared by the National Employment Law Project and the Partnership for Working Families shows how Seattle is an important step in the Uberization of the US.

During 2016, Uber had under contract over 370 lobbyists, which is more than Microsoft, Walmart and Amazon combined. Their lobbying initiative was aimed at all levels of the country, and it enabled Uber to introduce Uberized bills all over the US. In states where Uber met resistance, they either steamrolled the resistance or ignored it, and operated illegally, waiting for the moment that they could operate legally.

Uber has had issues in Seattle, in Washington to be exact, and that is why they are now facing the City of Seattle in court. However, there is much anger at the government for supporting Uber's side of the case. Many detractors of Trump's administration claim that they have abandoned the working-class American by supporting Uber.

This is in contrast with 40 other states that already passed laws detracting from city rights to create their own local transportation network regulations. This lobby induced success has given Uber total control over 40 states and also showed how Uber used both parties to help succeed in these states. Uber presented a bi-partisan front and enlisted the aid of every and any politician it could get on board.

Uber's lobby activities have been costly when overzealously applied, such was the case in Chicago, where their lobbyist Plouffe paid a $90,000 fine, and only last month the Uber had to pay a $32,500 fine for a lobbyist that was not properly registered.

Money and lobbyist don't always provide success, but they do provide results that have an echoing effect. Also, in some states, it is possible to see how Uber steamrolled their decisions through the local regulators. Take the State of Ohio, where the Freedom of Information Act lays bare the documents relating to lobbying. Robert Klaffky, an Uber lobbyist, sent a state representative, Mike Duffey an e-mail, in it, he stets: "Here is a draft bill for Ohio," the lobbyist wrote. "Please review and let's set a time we can chat to walk through it."

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This is not so unusual since politicians tend to request chewed data for review, this means that industries send them the proposed law or changes to a law, and then the politician's legal team review it and propose it to the Senate or regulating the body. In most cases, the end product is different from the original version, even if the negotiations are sometimes planned ahead of time.

An Uber spokesperson told the media that "Regulating ride-share at a city level creates barriers to entry and costs to drivers, confusion for riders, and unnecessary administrative costs for local governments — all without any increase in safety for riders and drivers or benefits for local jurisdictions. We will continue working with lawmakers and regulators to develop rules and policies that benefit riders and drivers while providing businesses like ours with legal certainty."

The Tired Driver

Don Creery, the head of the Uber drivers' Union initiative told the press that "To me, it looks like the government is sheltering the business class from us." Creery has been fighting the union issue for two years now, and he doesn't blame the other drivers that watch what is happening from giving up and concentrating on making an income. Creery said, "I don't blame them, what do we have to show for it?" He also agrees with the critics that claim if the issue reaches the supreme court they will lose; he said "People say it could go to the Supreme Court. That's an anti-labor court, and I think we would lose."

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The Bottom Line

The Uber-Seattle case is not simple; there are too many complex legal issues to discuss. Apart from the federal anti-trust laws, there are state laws and local regulations that need to find a way to mesh and not contradict one another. The language has to be such that there is no confusion.

The final decision will either be in the States favor, which will lead Uber and the Government to go to the Supreme Court, as well as prompt Uber to lobby for federal changes in the law that ill relate directly to rideshare. They might even get a Presidential directive in place that will specifically deal with rideshare issues. Both sides believe that if the case does go to the Supreme Court, Uber will win. If the court decides for Uber, then the drivers have sealed any future claims, and the case of unionization dies in Seattle.

The drivers that stand behind the City of Seattle are understandably upset. However, they should have thought about what they were doing before they started the process. Politics is all about money, power, and trade. Politicians decisions will always be about the long-term effect on elections, as well as the money and power that can come out of a regulation change or new law. Once the drivers forced Uber's hand, they exposed all their ammo in one go, allowing Uber to prepare and retaliate. Another issue that they did not consider, is that since drivers are all in it for their own survival, organizing enough drivers to strike is virtually impossible. At the end of the day, every driver is a self-employed individual that owns a car with debts and expenses to meet every month. Uber was never about being a full-time job, and only a very small percent of the drivers is full time. Statistics shows that only 7% of all Uber drivers have been driving for more than 12 months. Even if Uber did allow only those individuals that have driven for over 12 months to unionize, they would still not represent enough ground level power to force price fixing. However, Uber has no intention of opening this to debate.


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(Andrew Martin) #2

It was obvious that Seattle was doomed to fail. The anti-trust laws are in place for a very good reason, and one of them is to block unions such as the teamsters from becoming stronger than they need to be. Imagine the electoral power an Uber union would have, when over a million potential voters could be co-erced into acting as a cartel for more than juts price setting.