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 The law approved unanimously by the Seattle City Council
recognizes the right of drivers for on-demand ride companies known
as Transportation Network Companies, as well as taxi and for-hire
drivers, to collectively negotiate on pay and working conditions.
Uber and Lyft both opposed the measure and argue that federal law
precludes such local legislation. The law marks a new approach to
addressing the heated debate over whether Uber and Lyft drivers
ought to have some or all the legal rights of employees, which would
substantially increase companies' costs.
Despite facing regulatory battles in Seattle, both companies have
growth in popularity there, with thousands of drivers using the app.
"Unfortunately, the ordinance passed today threatens the privacy of
drivers, imposes substantial costs on passengers and the city, and
conflicts with longstanding federal law," said Chelsea Wilson, Lyft
public policy communications manager.
 Uber said about half its drivers work fewer than 10 hours a week,
and there is such a high turnover of drivers that designating them
as employees or allowing them to unionize doesn’t make sense.
Uber is widely expected to sue, although Lyft said it did not have
plans to sue.
Seattle Councilman Mike O'Brien, who proposed the measure, predicted
Uber would sue and said the city had the resources to defend the
ordinance.
"We now have a $60 billion organization making a lot of money while
some drivers are making less than $3 per hour," he said.
At least 1,000 drivers have already organized as part of the
App-Based Drivers Association.
The Seattle law does not rule on whether drivers are employees or
contractors but extends to drivers rights usually reserved for
employees.
"It's a reaction to the employment issue without solving that bigger
problem," said Richard Reibstein, a labor lawyer who runs the
independent contractor practice at Pepper Hamilton. "Until such time
as their status is resolved in each state, those who are unhappy
will seek political action to advance their causes."
Hundreds of union supporters and drivers packed the city council
chambers Monday afternoon.
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"It's pretty much making minimum wage" after deducting costs, said
Sean Janaba, 34, of Seattle, who has been driving for Uber for three
years. "Things are getting worse."
The per-mile fare for Uber and Lyft rides in Seattle is $1.35, a
little more than half what it was a couple years ago. In other
cities, Uber has regularly cut fares to attract passengers.
At least nine states have issued rulings that drivers are
independent contractors, but in two separate cases in California,
drivers were deemed employees and got unemployment benefits.
Other drivers have sued Uber for misclassifying them as contractors.
Uber is facing a class-action suit in California that could include
tens of thousands of drivers.
Uber and other opponents to the Seattle ordinance argue that federal
law prohibits independent contractors from collective bargaining,
since the law only covers employees.
But farm workers and home health care workers, who are also not
addressed by the federal law, have been allowed to unionize under
state law, which could give Seattle a defense for its action.
To have a city pass such a law, however, "is extremely uncommon,"
Reibstein said. Some question whether cities have that legal
authority.
There are also federal anti-trust statutes that could be triggered
if driver unions are perceived as fixing prices and eroding free
market competition.
(Additional reporting by Mike Rosenberg, Editing Peter Henderson &
Shri Navaratnam)
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