As the result of a grassroots campaign by Seattle ride-share and taxi drivers, the Seattle City Council in December voted 8-0 to allow drivers who work for Uber and Lyft as well as taxi drivers to form unions and bargain collectively.
Ride-share and taxi drivers in Seattle are classified–some would say misclassified–as independent contractors, and as such, they do not have the same protected right to organize and bargain collectively that most workers have.
The Seattle ordinance gives them that protection.
Ride-share drivers aren’t the only unprotected workers. They are joined by a large contingent of workers who work in many fields.
These so-called independent contractors make up the bulk of labor in the new sharing economy, businesses that operate internet platforms that link customers to service providers by apps.
In California, state Representative Lorena Gonzalez has introduced the 1099 Self-Organizing Act, which if enacted would extend organizing and bargaining protections to workers in the sharing economy.
The sharing economy is a growing part of the US economy. About 20 percent of jobs created since the end of the Great Recession are in app-based companies like Uber and Lyft and temporary staffing agencies, both of which rely heavily on a precarious workforce, unprotected workers who work for low pay and receive few if any benefits.
Companies like Uber have been able to stay afloat and attract investors such as Goldman Sachs, which has $1.6 billion invested in Uber, by shifting much of their business costs and risks to their workers.
Uber drivers pay for their vehicles, pay for their insurance, don’t have any safety net benefits such as company-sponsored health care.
If they are hurt on the job, they won’t be able to collect workers compensation because the company doesn’t pay their workers compensation insurance premiums.
If the economy takes a downturn and drivers don’t work because there isn’t enough demand for Uber services, drivers can’t collect unemployment insurance because Uber doesn’t pay for it.
When Uber drivers are too old to work and must retire, they won’t collect Social Security because Uber doesn’t make Social Security contributions for its drivers.
“Since I started driving for Uber, Uber has cut our pay without notice, terminated drivers without giving a reason, and blocked our efforts to improve our working conditions. We’re looking for fairness and the ability to earn a living wage,” said Peter Kuel, a member of the App-based Drivers Association after the Seattle City Council passed its worker organizing ordinance.
The Seattle ordinance allows drivers for app-based companies and taxi companies to choose a non-profit organization to represent them.
The ordinance requires the city to share the names and contact information of app-based and taxi drivers registered with the city to any non-profit organization interested in helping the drivers form a union.
When a majority of drivers for a company express an interest in joining the non-profit organization, the company must recognize and bargain with the non-profit organization.
“This (ordinance) means a lot to us drivers,” said Fasil Teka of the App-based Drivers Association. “It can have a positive impact, not just for drivers in Seattle, but for independent contractors across the country.”
The bill introduced in the California General Assembly by Rep. Gonzalez seeks to accomplish the same thing for workers in the sharing economy but in a slightly different way.
The bill would allow independent contractors working for app-based companies to organize themselves and bargain collectively. The bargaining unit wouldn’t have to be affiliated with an established union.
“There are pitfalls and benefits to the (sharing) economy,” said Rep. Gonzalez to the Los Angeles Times, “We need laws that promote it and protect it, but also protect workers and ensure they don’t slip through the cracks.”
Gonzalez’s bill is far from being a sure thing to become law, but it does represent an acknowledgement among some policy makers that rights of independent contractors need to be redefined and expanded.
It’s not likely that companies like Uber will give up their ability to shift their business costs to their workers without a fight.
Uber has already indicated that it will challenge the Seattle ordinance in court.
Nevertheless, passage of the Seattle ordinance and the introduction of the California bill show that the fight to extend basic protections to independent contractors has begun and won’t be going away.