The U.S. Chamber of Commerce filed a lawsuit Thursday challenging a Seattle ordinance that allows ride-sharing drivers to unionize as a collective unit.
Uber, Lyft and other ride-sharing ventures are a popular subdivision of the sharing-economy, which involves digital platforms individuals use to create their own business venture. The Seattle ordinance, however, treats the drivers like employees, which could undermine the basis of the entire model.
The lawsuit seeks to reverse the ordinance.
“This ordinance threatens the ability not just of Seattle, but of every community across the country, to grow with and benefit from our evolving economy,” Chamber Leader Amanda Eversole said. “Technology companies are leading the charge when it comes to empowering people with the flexibility and choice that comes with being your own boss, and that is something to be championed.”
The Chamber alleges that the ordinance violates federal law under the Sherman Antitrust Act. The law aims at promoting competition by preventing businesses from forming cartels or engaging in collusive practices by consolidating together. The lawsuit argues that by allowing unions to organize drivers as one collective bargaining unit they form a cartel.
“Unions are only now attempting to impose a local regulatory scheme to organize independent contractors,” Chamber Chief Legal Officer Lily Fu Claffee said. “This has never been tried before, because it is clearly inconsistent with federal antitrust and labor laws.”
Drivers using Uber are essentially their own boss. They are not employed by the developers but instead contract with them. Contractors are considered their own independent operations as opposed to employees which work for a company. Teamsters Local 117, which helped to support the measure, argues laws must change with technology to help protect workers.
“As our economy changes, we need to ensure that workers’ rights are protected,” Local 117 Secretary-Treasurer John Scearcy said in a statement provided to The Daily Caller News Foundation. “Seattle’s new law is smart, innovative policy that helps restore self-determination for thousands of drivers in our region who are struggling to earn a living.”
Some have noted skepticism the union attack is for the benefit of employees. Employees can be subject to collective bargaining which makes it easier to unionize workers. Labor unions often use collective bargaining because it allows them to unionize an entire workplace at once. Contractors are not subject to collective bargaining because they don’t belong to a workplace.
The sharing-economy empowers workers to choose their own hours and it provides more flexibility on how they work. It is a primary reason the sharing-economy has grown in popularity by both service providers and consumers.
Labor unions are not alone in their push to get contractors classified as employees. Federal labor agencies have also worked to challenge the model and make it more like its traditional counterparts. There have also been lawsuits by workers who claim by being classified as contractors they were being taking advantage of.
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