U.S. Chamber Sues Seattle To Prevent Uber Drivers From Unionizing

CREDIT: AP Photo/Ted S. Warren

Jen Joyce, a community manager for the Uber rideshare service, works on a laptop before a meeting of the Seattle City Council, Monday, March 17, 2014, at City Hall in Seattle. The Council was voting on rules and regulations that have pitted supporters of ride-share and other non-traditional transportation companies against taxi and for-hire drivers and operators.

Uber has a natural enemy of government agencies threatening to impose labor regulations. But the ride-sharing company now has a big ally in the U.S. Chamber of Commerce (USCC), which sued the city of Seattle for passing a law that allows ride-sharing and taxi drivers to unionize.

“The ordinance will burden innovation, increase prices, and reduce quality and services for consumers,” the agency said in a news release announcing the lawsuit.

According to the USCC’s complaint, the ordinance passed by the Seattle City Council in late 2015 would give drivers illegal influence over fare prices based on their pay.

The agency claims the Teamsters Union-sponsored law violates the Sherman Antitrust Act, which prohibits a contract from restraining trade or commerce across multiple states. “This provision forbids independent economic actors — such as independent contractors — from colluding on the prices they would accept for their services or otherwise engaging in concerted anti-competitive action,” the complaint states.

Earnings are a major issue for Uber drivers. Protests have erupted nationwide over steep fare cuts intended to boost ridership. But full-time drivers have complained the slashed prices affect their livelihood and don’t cover daily expenses.

Uber is fighting a class-action lawsuit that contests the company’s policy to classify drivers as independent contractors. Drivers and labor activists say the policy offers fewer job protections, such as living wages and benefits compared to employees, and can be exploitative when the company has control over fares and performance requirements.

Uber strongly opposes Seattle’s ordinance, which hasn’t yet been adopted, and launched a call campaign to discourage drivers from organizing. Uber representatives call drivers to ask their thoughts on the new law then tell drivers that unionizing wouldn’t be a good fit for them or Uber, according to a script obtained by the Seattle Times.

Collective bargaining and unionization do not fit the characteristics of how most partners use the Uber platform. Collective bargaining usually takes place in situations with a workforce of individuals who work scheduled hours, usually full-time, and intend to make that job a career. That’s not how most Uber drivers use the platform.

Uber’s class-action lawsuit over employment status goes to trial in June, but the final outcome in the matter may lie with the National Labor Relations Board. The labor board is currently reviewing at least four Uber employment status cases and is expected to make a universal decision on whether on-demand workers are employees. That decision could invalidate Uber and the Chamber of Commerce’s case for independent contractors.