The U.S. Chamber of Commerce sued Seattle on Thursday over the city’s new ordinance giving Uber and taxi drivers the ability to unionize.

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The U.S. Chamber of Commerce sued Seattle in federal court Thursday over the city’s new ordinance giving Uber and taxi drivers the ability to unionize.

The lawsuit filed in U.S. District Court in Seattle asks that the ordinance be declared unlawful and seeks an injunction blocking it from taking effect.

It cites federal labor and antitrust laws and says the ordinance will slow innovations in the “on-demand economy,” increase prices and lead to worse service for customers.

The Seattle City Council in December voted unanimously to give drivers for app-based ride-dispatch companies like Uber and Lyft, for-hire companies and taxi companies the right to collective bargaining.

The ordinance, the first of its kind in the country, sets out a process for independent-contractor drivers from a company to unionize and, if they do, requires the company to negotiate their working conditions. It was backed Teamsters Local 117, among other groups.

The National Labor Relations Act (NLRA) guarantees most private employees the right to collective bargaining. Opponents of Seattle’s ordinance have said the city lacks the authority to extend that right to independent contractors. Proponents have said the city can do so precisely because the NLRA leaves contractors out.

The Sherman Act seeks to preserve competition among businesses and deals with monopolies and price-fixing.

“This ordinance is unprecedented, and there are good reasons that none of the other approximately 40,000 municipal entities in this nation has previously tried to authorize collective bargaining by independent contractors: such an action is barred by well-established law under the Sherman Act and the National Labor Relations Act, among other laws,” the Chamber’s lawsuit says.

“Absent judicial intervention, the city of Seattle and thousands of other municipalities would be free to adopt their own disparate regulatory regimes, which would balkanize the market for independent-contractor services and inhibit the free flow of commerce among private service providers around the Nation,” adds the lawsuit by the Washington, D.C.-based lobbying group.

In a statement Thursday, Kimberly Mills, spokeswoman for Seattle City Attorney Pete Holmes, said, “We’re reading through the complaint we received just minutes ago. Our response will come in the answer filed with the court.”

Mayor Ed Murray, who chose not to sign the ordinance after the council passed it, said in a statement, “As I said when the legislation was passed last year, I strongly support the right of workers to organize to ensure a fair and just workplace.”

He added, “I stated at the time — and still believe — that the administration would likely need to seek clarifying legislation from the council before full implementation of this law. Today’s lawsuit will now inject a level of uncertainty for the city on how best to proceed with any future legislation and implementation.”

Uber opposes the ordinance and has been calling its drivers in Seattle to tell them why. In a statement Thursday, the company said the lawsuit “raises serious questions not only about whether the city has run afoul of federal laws, but also about the impact on drivers who rely on ride-sharing to earn flexible income,” Reuters reported.

In a separate statement, Lyft said Seattle’s ordinance “may undermine the flexibility that makes Lyft so attractive both to drivers and passengers,” the news service reported.