Uber Braces for Unionized Drivers in Seattle

What might seem to be a futile attempt at overturning a traditional law that independent contractors cannot unionize as it constitutes an anti-trust issue? The City of Seattle decided to take the law into is own hands and allow Uber and Lyft drivers to unionize. In response, the US Chamber of Commerce (COC) stepped in and sued the City of Seattle.

The COC is not a friend to Uber or Lyft; it is an unbiased body that is trying to maintain a legal framework that supports the law in every possible way. Since the anti-trust laws do not allow for independent drivers to unionize, the case of Uber drivers is a major issue, since if one independent contractor will be allowed to unionize it would destroy the entire infrastructure of the law. So the case here is not Uber or Lyft, it is about the US Legal system and the impact this case will have on the anti-trust laws. The issue of anti-trust law comes into effect when "price fixing" is probable. In the case of unionized independent contractors, this would lead to "price fixing" on a major scale.

The City of Seattle decided that they knew better than the law of the US, and allowed Uber and Lyft drivers to form a union. Uber and Lyft drivers are all signed on a partnership contract that defines drivers as an independent contractor.

The first response to the COC's law suit was rejected by District Court Judge Robert Lasnik in August 2017. The COC then appealed this finding and is now facing three federal judges in the 9th Circuit of the Court of Appeals. There are three sides in this appeal; the COC, the City of Seattle and the Federal Trade Commission (FTC).

The City of Seattle is trying to pull a fast stunt, by claiming that there is a link between the low wages paid by Uber and the safety of the passengers. Where they claim that the drivers try to supplement their incomes by driving for too many hours, which causes fatigue and is a safety issue, or they subsidize their income by reducing maintenance costs, which leads to unsafe vehicles, and again to safety issues.

The current judges are skeptical of these claims, and not because the claims are unjust, but because they have nothing to do with the anti-trust issue. Safety and reliability are an important issue, but not important enough to defy an anti-trust law and give the drivers the potential power to "price fix" through leveraged negotiations.

Uber claims it presented its case well enough and stood by its position that the drivers are independent contractors they cannot unionize and that the gross incomes are set at $19 - $21 which is well above the city's minimum wage. The drivers are split in their response, where some claim only to make around $4-$5 per hour and others claiming to make the minimum wage of $15 per hour. What the drivers do not state is the number of hours they work for each pay increment.

The City of Seattle expects it will have to take the issue to the Supreme Court.

They most probably will, but the issue is not about the drivers, it is about the law, and the Supreme Court will have to factor in the issue of Uber's driver contracts to make a final decision. Another issue is the law itself; the Supreme Court will most probably defer the changes in the anti-trust law to the Senate, claiming that the unionization of independent contractors is the main issue of the law and as such must be addressed by the lawmakers. The bottom line is this. First, the Supreme Court has to decide whether or not the drivers are independent contractors or employees. If the result is that they are independent contractors, the chance that the Supreme Court will change the anti-trust laws in such a major way is zero.

It comes down to understanding the interaction between the Supreme Court and the House. The Supreme court will on many occasions provide an interpretation of the law, in some instances they can cancel a law that is considered anti-constitutional. However, this is not the case here. There is no issue with the constitutional state of the law, it is a purely a commercial law, with implications on the effectiveness of the US market. Since the case is dealing with issues that are based on defining one side (drivers), before interpretation can be made (employees or independent contractors), there is no chance that the Supreme Court will go against the interpretation of the law.

In other words, if the drivers are defined as independent contractors by the Supreme Court, the case will be closed, and the City of Seattle will have shot itself in the proverbial foot by trying to be too clever for itself.

I am always amazed at how easy the legal system is in the US. We can just do what we want and claim what we want and then battle it out in court, waste money and time and end up with nothing but a headache. In this instance, honestly, do those idiots in Seattle think that the Supreme Court is going to change the anti trust and labor laws for rideshare drivers? I think its more a case of keeping lawyers paid, since they are the only winners here.

You never know. It depends on how strong the argument is. You also gotta realize that now there are about 2-3 million rideshare drivers around the country. So yeah, this case does carry weight.

Yup, it does, but the anti-trust laws represent 340 million Americans, I don’t think 0.8% will do the trick. The labor and anti-trust laws speak about not allowing unionizing independent contractors for a reason. If Uber/Lyft loses, it means all the plumbers, carpenters, gardeners, and just about anyone that shows a crack when they bend over will be able to unionize and set prices. Naaw, I agree with Andrew, it won’t happen.

Hey Steve, guess what. I was reading up on the Anti-Trust laws, commonly known as the competition laws, and the labor law, which was set up in 1935. Here is a direct quote from that law, regarding independent contractors. :
Also cited NLRA or the Act; 29 U.S.C. §§ 151-169
[Title 29, Chapter 7, Subchapter II, United States Code]
(3) The term “employee” shall include any employee, and shall not be limited to the employees of a particular employer, unless the Act [this subchapter] explicitly states otherwise, and shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment, but shall not include any individual employed as an agricultural laborer, or in the domestic service of any family or person at his home, or any individual employed by his parent or spouse, or any individual having the status of an independent contractor, or any individual employed as a supervisor, or any individual employed by an employer subject to the Railway Labor Act [45 U.S.C. § 151 et seq.], as amended from time to time, or by any other person who is not an employer as herein defined.

This means that by law, independent contactors are not employees and cannot unionize. The case of the city of Seattle will fall in this paragraph, since the Supreme Court will not “translate” the law, it will read it as it is, and will give a finding that is based on the law. In other words, the Supreme Court will send the city of Seattle to Congress to make changes to the law, since the law does not consider “gig economies” which were definitely not around in the 1930’s, and in fact were not around till the beginning of the 21st Century.
The antitrust law basically states that you cannot “price fix”, and the case of a unionized gig economy could lead to price fixing. However, the case of antitrust in reference to Uber/Lyft drivers is weak, since the drivers are not interested in price fixing only in getting a fair fare income. Which means that the only defense Uber has against Unionization is through the labor law and their power of lobbying the hill to defend against removing “gig economy” drivers from their status as “independent contractors”.

I think the issue of unionization is daft. I didn’t become an Uber driver to start fighting them over pay. I joined them to subsidize my income with extra cash. I work around 4-6 hours a day, 5 days a week with Uber, actually 2 days over the weekend and 3 days during the week. The rest of the time I work with my cousin in his business and do some individual contract work. I don’t want to start paying union fees, having to ready up on bylaws and then rely on some a-hole politician use the drivers union to Hoffa himself into the White House. I am against unionizing drivers, but I am for creating a dialog with Uber to discuss a model that pays drivers a basic income that takes root when a driver works over a certain number of hours a month. Sort of like a subsidized minimum wage delta that comes into play when you work 40 hours a week for Uber. This means that they would have to make sure your hourly income was no less than the minimum wage level.