Seattle council votes to give Uber, Lyft drivers bargaining rights

The Seattle City Council passed a measure on Monday that will allow drivers for services such as Uber and Lyft to organize, a major development in a debate that is being closely watched for what it means about the so-called on-demand economy.

Drivers for Uber and other ride-hailing services are independent contractors, so they do not get the benefits that go to many employees. That includes a right to negotiate with their employer as a group.

{mosads}The law passed Monday gives them the right to vote to collectively bargain through a non-profit. Only drivers who meet certain criteria will be eligible to be represented by the organizations sanctioned under the law. It also applies to traditional taxi drivers and to other drivers-for-hire.

Seattle Mayor Ed Murray (D) said that he would not sign the bill, instead opting to allow it to pass into law without his approval because concerns he has with the legislation have not been resolved.

“I remain concerned that this ordinance, as passed by the Council, includes several flaws, especially related to the relatively unknown costs of administering the collective bargaining process and the burden of significant rulemaking the Council has placed on City staff,” he said in a statement. “As this ordinance takes effect, my administration will begin its work to determine what it will take to implement the law. I believe it will be necessary to seek additional clarifying legislation from the Council.”

It is the bill’s application to the on-demand economy that has received the most attention — and ties the effort to the highest profile example of shifts in the labor market towards independent contract work. Mike O’Brien, the council member who sponsored the bill, said on Monday that “we’re seeing a lot of changes that are very disruptive.”

Drivers for ride-hailing services have been trying to organize for some time, but those instances have been limited. In some places, workers formed app-based drivers associations affiliated with local unions. The association that currently organizes Seattle’s drivers could attempt to organize them under the new law.

Lyft has said in a statement before the vote that the law “threatens the privacy of drivers, imposes substantial costs on passengers and the City, and conflicts with longstanding federal law. We have urged the full Council and the Mayor to reject the bill.” Rival company Uber simply stressed that its drivers appreciate the flexibility that comes with being a driver for an on-demand ride-hailing platform.

The law could have implications far beyond the on-demand economy — raising the prospect of collective bargaining rights for contract workers in other fields. This could have an effect on a growing element in the economy: Intuit predicts that “contingent” workers, some of them contractors, will make up greater than 40 percent of the workforce by 2020.

Challenges to the law could center around the accusation that it enables workers to engage in price-fixing, in violation of antitrust law. Some have also questioned whether the city’s ordinance will conflict with federal labor law.

The move comes as Washington considers what it can do to help build a safety net for workers in the on-demand economy. Sen. Mark Warner (D-Va.) and others are warming to the idea of forbearing regulators from cracking down on companies experimenting with ways to provide benefits — though it remains to be seen whether that, or any other federal action on the issue, will come to pass.

Updated at 10:18 p.m.