While Seattle's techie leaning population may be all in on the the “share economy” of new services available at the touch of a smartphone screen, rideshare applications (such as Uber, Lyft, and Sidecar) have always been a sensitive subject. Last year, former council member Sally Clark led the charge on restricting the number of licensed rideshare drivers in the city in response to outcry from traditional taxicab drivers claiming unfair competition; Mayor Ed Murray didn't like the legislation, formed a task force, and got rid of the caps.
More recently, the rideshare companies have taken heat from their own drivers, organized labor, and council member Mike O’Brien, who introduced legislation in late August to allow Seattle’s for-hire drivers (that includes drivers for both taxicab and rideshare companies) to unionize. That legislation unanimously passed the council’s Finance and Culture committee last Friday.
Aimed at combatting low pay and poor working conditions faced by for-hire drivers, the ordinance would allow drivers to form “Driver Representative Organizations” (aka unions). These organizations would have to be registered as nonprofits by the state of Washington, licensed by the city, and would be governed democratically by their membership. Mainly, it would allow drivers—who currently work as independent contractors—to negotiate with rideshare and taxicab companies. (Seemingly proving O'Brien's point regarding rideshare companies' bad labor practices, a Uber driver's account was deactivated by the company following the his appearance at O'Brien's August press conference and rollout of the legislation.)
Despite the unanimous vote, council member Mike O’Brien (the original sponsor of the legislation) told PubliCola that he doesn’t anticipate the ordinance to go to full council anytime soon due to the likely legal challenge from rideshare companies. “What we’re attempting to do here is something that hasn’t been done before,” said O’Brien. “And that’s to create space for independent contractors to collectively bargain for their work conditions if they so choose.”
O’Brien is basically right on the former. Organizing isn’t entirely new for Seattle’s taxicab and rideshare app drivers. In 2012 taxicab drivers from all the major dispatcher companies such as Seattle Yellow Cab and Orange Cab formed their own taxi drivers association in an attempt to harness the potential power of collective bargaining. Later on, in 2014, rideshare drivers organized their own association called the “Apps Based Drivers Association.” But these associations can't really compel employers to sit down with drivers and negotiate.
"You can go to a company (who is your employer) and make some demands. But that won’t force the employer to work with you," said Dawn Gearheart, business representative for Teamsters 117, a Washington (and national) labor union representing a range of private and public sector workers. (Teamsters 117 has historically supported local taxi cab drivers in their organizing efforts.)
In contrast, O’Brien’s legislation forces both driver unions and their employers to bargain a contract within 90 days following the formation of driver representative organization before the matter goes into arbitration. In addition, the legislation also gives the city’s Director of the Finance and Administrative Services Department the general authority to fine either party up to $10,000 per day if they violate any measures of the ordinance.
For both sides, the issue comes down to employee classification. Taxicab and rideshare drivers are considered independent contract workers. Contract workers, along with agricultural workers and public sector employees, are not covered by the 1935 National Labor Relations Act (NLRA), which protects most private sector employees’ right to form unions. Uber representatives have routinely testified before city council arguing that the NLRA explicitly preempts independent contractors from unionizing.
However, O’Brien and his labor allies say that while the NLRA does not cover independent contractors, it also doesn’t prevent state and local governments from enacting legislation allowing contractor unionization. They point to the Washington Federation of State Employees union (which represents 40,000 employees across Washington in regular negotiations with the state) and California state law (passed in 1975) that ensures agricultural workers’ right to organize.
“We feel really good about the policy,” said O’Brien. “We think it’s consistent with what’s happened in other areas.”
Local labor attorney Dmitri Iglitzin agrees. “It is well established that for workers who are not covered by the NLRA, state and local governments can create their own alternative means of regulating labor relations,” said Iglitzin. (Iglitzin frequently provides legal assistance to Teamsters 117.)
“The legitimacy of this law [O’Brien’s legislation] comes entirely in the fact that Uber and Lyft insist that these [drivers] are private contractors and not employees,” Iglitzin added. “If Uber wanted to pay state and federal taxes and unemployment benefits and disability benefits for its drivers and treat them like employees (and make them employees) then we wouldn’t be having this conversation … one consequence of that [making drivers employees] would be if drivers wanted to unionize they could.”
“They [rideshare companies] can’t have it both ways,” he added.
Uber has gotten into numerous ongoing legal tussles over its classifying drivers as independent contractors. In early September, a San Francisco judge ruled that Uber drivers (currently classified as independent contractors) are similar enough to employees to be granted class-action status, allowing them to collectively sue the rideshare company to reclassify drivers as employees.
O’Brien said that the city’s Law Department will be examining the ordinance over the next few weeks during the council's budget talks to ensure its legal standing. “We recognize that they might choose to fight this in the courts and we just want to take our time.”
The City Attorney’s Office declined to comment on their analysis of the legislation due to attorney-client privilege between them and the city council.