Uber Drivers Gain Right to Unionize With First-of-Its Kind Seattle Law

Author: David B. Weisenfeld, XpertHR Legal Editor

December 17, 2015

Seattle has become the first US city to allow drivers for Uber, Lyft and other ride-hailing company apps to unionize. The Seattle City Council voted unanimously to enact this groundbreaking measure. And while Mayor Ed Murray says he will not sign the ordinance, his signature is not needed for it to become law.

Drivers for taxi and app-dispatch companies such as Uber and Lyft have been consistently classified as independent contractors rather than employees, preventing them from unionizing under the National Labor Relations Act.

The Seattle ordinance notes that there is currently no effective mechanism for for-hire drivers to meaningfully address the terms and conditions of their contractual relationship with the entity that hires them. The result is that these drivers lack the power to negotiate these issues effectively on an individual basis.

The ordinance also asserts that business models where companies control aspects of the drivers' work, but rely on their being classified as independent contractors, render for-hire drivers exempt from minimum labor law requirements. "Leveling the bargaining power between for-hire drivers and the entities that control many aspects of their working conditions," it adds, will lead to more stable working conditions and better ensure that drivers can perform their services in a safe, reliable and cost-effective way.

Uber and Lyft both opposed the Seattle law. Uber said about half of its drivers work less than 10 hours per week and that designating them as employees or allowing them to unionize does not make sense.

But Seattle Councilman Mike O'Brien, who proposed the measure, said of Uber, "We now have a $60 billion organization making a lot of money while some drivers are making less than $3 per hour."

Uber currently faces a class action lawsuit in California filed by some drivers concerning their employment status. Union organizers in California have said the Seattle vote could influence their own cities.

Seattle has often been a trend-setter on employment issues. Last year, it became the first major city to pass a $15-an-hour minimum wage law. However, Uber may challenge the latest ordinance in court so this is likely far from the last word on this unionization issue.