Even more is riding on Seattle’s new ordinance allowing Uber drivers to unionize now that California drivers have settled their class-action lawsuit against the company.
Seattle’s new ordinance giving Uber, Lyft and taxi drivers the ability to unionize may become more important in the wider scrum over rights for gig-economy workers, now that California Uber drivers have settled a huge class-action lawsuit against the company.
The proposed agreement calls for Uber to pay the drivers as much as $100 million and make other concessions, such as regular meetings with driver associations.
But it keeps the drivers categorized as independent contractors. They had sued saying they should instead be considered regular employees, able to unionize.
Though the settlement covers only California and Massachusetts drivers, Uber announced a similar deal with New York drivers Tuesday, a sign the $62.5 billion San Francisco-based company could adopt the same approach across the country.
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Seattle’s ordinance may complicate that, however.
Passed in December and the first of its kind in the U.S., it uses city law to give independent-contractor drivers what regular employees already enjoy under the National Labor Relations Act — the right to collectively bargain, in a union, over such items as pay and benefits. The ordinance could open the door for contractors in other sectors to unionize, as well.
“This takes some wind out of the sails of litigation being the solution and puts more emphasis on Seattle,” said Charlotte Garden, a Seattle University professor who specializes in labor law. “The settlement is explicit about the driver associations not being unions, whereas the approach here involves real collective bargaining.”
That’s why the U.S. Chamber of Commerce is suing to block Seattle’s ordinance from taking effect, and why Dawn Gearhart has been getting a lot of phone calls.
The business representative for Teamsters Local 117 has been organizing Seattle-area taxi drivers and drivers for ride-dispatch companies like Uber and Lyft.
“Since the settlement, we’ve heard a lot more from around the country,” Gearhart said. “People who were waiting (on the case) want to start advocating for themselves.”
Garden said she was surprised when the California case settled because both sides had vowed to go to trial in June.
The agreement must still be approved by a judge, and lawyers representing Uber drivers in a number of other states, including Washington, have submitted an objection, saying the deal would net most drivers less than $25.
“The settlement amounts are clearly inadequate,” said Paul Napoli, a lawyer representing drivers who are suing separately from the California class-action suit.
Even if the settlement goes through, other drivers may move ahead with individual lawsuits, said Shannon Liss-Riordan, the lead lawyer for the California plaintiffs.
“Contractors or employees, I’m sure that will continue to play out,” she said.
Liss-Riordan said her clients decided to strike a deal for strategic reasons.
They knew an appeals-court panel might overturn a key ruling on a technical aspect of the case and were eager to lock down the concessions, she said. Those include Uber allowing drivers to solicit tips and appeal when they’re kicked off the app.
“I’m pleased about the settlement,” Liss-Riordan said. “Uber has agreed to it, which takes us further down the road than other efforts have gone. It doesn’t provide drivers with all the rights employees have under federal law, but it’s a step toward that.”
The City Council member who championed Seattle’s ordinance is pleased with Uber yielding some ground, he said. But Mike O’Brien said his measure is still needed.
If drivers are going to continue to be categorized as contractors, “it becomes increasingly important for them to have a voice,” he said. “Seattle could be a model.”
In New York, Uber has consented to hold meetings with a drivers association affiliated with the local Machinists union. But Uber spokesman Aaron McLear said the California and New York deals are in no way setting the stage for drivers to unionize.
The company opposes Seattle’s ordinance, arguing the city is usurping federal authority and violating antitrust law.
“This is different than collective bargaining and unionization,” McLear said. “This is independent contractors who are part of a guild.”
Don Creery, a 62-year-old driver who lives in the Green Lake neighborhood and who pushed for O’Brien’s ordinance, is dubious of the California and New York deals.
“The very fact that Uber agreed makes you a little suspicious,” he said. “These things aren’t going to resolve the primary issue, which is the pay not being adequate.”
Creery said he likes Seattle’s approach because it gives drivers bargaining power while allowing them to stay independent.
Seattle officials are still developing the rules that will govern the implementation later this year of the new ordinance.
The California and New York agreements include setting up panels of experienced drivers to weigh in when other drivers appeal being booted off the Uber app. McLear said the company has been testing that change in Seattle.
“We’re always looking for new ways to respond to feedback from our drivers,” the Uber spokesman said.
Gearhart said the company has other motivations. The Teamsters organizer believes Uber is making deals partly to buy time until it can switch to driverless cars.