The argument that collective bargaining among Uber drivers is comparable to illegal price fixing is absurd, given the fact that drivers are currently forced to accept Uber’s “fixed prices.”
IN recent weeks, Uber heralded its emerging fleet of self-driving cars and $3.5 billion capital infusion, affirming for many what they already believed about the ride-share giant: Uber is the future. Summoning a ride from your pocket that is hindered by neither snow, nor rain, nor gloom of night (surge pricing notwithstanding) can certainly feel like the future. But for its drivers, many of whom struggle to piece together stable wages, Uber is the past resurrected.
As the undisputed leader of the on-demand economy, Uber argues that its innovative business model has made “traditional” workplace laws unnecessary. By classifying its drivers as independent contractors, Uber avoids paying millions of dollars in taxes and prevents its workers from accessing employment protections, such as wage and hour standards, safety requirements, anti-discrimination laws and the right to form a labor union.
To address this imbalance, the Seattle City Council — demonstrating that local governments can also innovate in this new economy — voted unanimously last December to give drivers for Uber (and its mustachioed doppelgänger, Lyft) the right to bargain collectively over wages and working conditions.
The U.S. Chamber of Commerce, the powerful employer lobby, swiftly filed a lawsuit on the industry’s behalf to block implementation of the ordinance. Though the technology fueling the on-demand economy may be new, the Chamber’s lawsuit recycles defunct antitrust arguments made by employers more than a century ago, during the not-so-gilded industrial era.
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For example, the lawsuit casts collective bargaining among drivers and companies as illegal price fixing. This argument is absurd, given the fact that drivers are currently forced to accept Uber’s “fixed prices,” related to rates, fees and charges, which the company can, and does, change without notice. And although Uber overwhelmingly dominates a market of only two competitors, the Chamber raises an implausible threat that low-wage drivers — but not Uber itself — could engage in “criminal collusion,” “conspiracy,” or a “cartel” if provided the basic rights of employees.
Calling your workers criminal cartel members is hardly proof that we’ve been transported to a world in which the regulation of labor relations is no longer necessary. This ride is in reverse.
Early American history is filled with cases of employers misusing antitrust law to defeat union organizing. Beginning in 1806, when a Philadelphia court ruled that the creation of a shoemaker guild would “disrupt market competition,” lower courts on up to the Supreme Court relied on common-law principles (and anti-union hostility) to find workers and unions guilty of “criminal conspiracy.”
In 1890, ostensibly to curb the unbridled power of monopolies like Standard Oil, Congress passed the Sherman Antitrust Act. Though designed to increase competition and help consumers, it did not take long for employers to co-opt the law to suppress worker organizing.
In case after case — from boycotting hat makers in Connecticut, to striking coal miners in Pennsylvania to picketing furniture haulers in Washington — courts issued injunctions against workers and unions based on a distorted interpretation of antitrust law.
This winning streak for employers came to a halt in 1935, when passage of the National Labor Relations Act gave workers the right to form a union and halted the perverse application of a law designed to check the unrestrained power of corporations to working men and women struggling to obtain a living wage.
Federal labor and antitrust laws were designed to alleviate economic inequality and protect consumers. The Seattle ordinance advances both these goals. Instead of embracing a process that would arguably embody the “sharing” ethos of this new economy, Uber (whose CEO, ironically, describes himself as a “trust buster”) is misusing antitrust law to maintain a pervasive imbalance of power among employers, workers and consumers.
Until the laws defining employee status reflect the economic realities of the on-demand economy, laws like Seattle’s are necessary to ensure that as technology transports us into the future, those who make that technology possible and profitable are not deported to the past.