The Seattle City Council recently passed a law that allows for-hire drivers (that are classified as independent contractors by Uber and Lyft) to form unions. This ordinance ended up triggering the U.S. Chamber of Commerce (“Chamber”) to file a lawsuit against the city of Seattle because of the potential effects it could have on labor law as a whole.  The Chamber alleges this far-reaching ordinance could allow any municipality to grant the ability for all types of contract workers to form unions. This broad range of effects could have huge impacts for other businesses that utilize independent contractors.

As for legal arguments advanced by the Chamber, it contends two things. First, it alleges that allowing these independent contractors to bargain collectively violates the Sherman Antitrust Act. Second, the Chamber contends that municipalities are preempted by federal law and cannot form mini labor relations systems.

Uber has told its drivers that unionizing “doesn’t make sense.” Some worry that since Uber has the ability to kick driver’s off the app, the threat of this may intimidate drivers to avoid unionizing. Others agree with Uber that unionizing does not make sense for the drivers that treat the ability to drive for pay as a part-time job with the flexibility for the driver to be “his or her own boss.”

While this issue will likely play out in the courts in the coming years, only one thing is certain. As new unique business concepts, like Uber and Lyft, become more mainstream the federal laws that govern both antitrust (Sherman Act) and labor (National Labor Relations Act) could use a 21st century makeover.

Brad Roberts

One Response to Reeling in Uber and Lyft and its Potential Effects

  1. ehicks says:

    This city ordinance is a really interesting development. Companies like Uber and Lyft have such distinctive business models, creating a lot of open questions about how their practices fit into existing law. Several disputes have arisen about whether drivers are employees or independent contractors, and maybe a more definitive answer on this question will clear up some of the confusion about how these companies operate within the existing legal framework.