by Alan B. Morrison, Lerner Family Associate Dean for Public Interest & Public Service Law, The George Washington University Law School
The founders of Uber had a great idea. We know that because millions of Americans use its service daily. We also know it because hundreds of thousands of individuals have signed up to drive for Uber, and many of them love the opportunities it presents: make a little extra cash, control your working hours, and make money from a car that sits idle much of the time.
On the negative side, Uber treats drivers as independent contractors, not employees, and that means that the drivers pay the employer’s as well as the worker’s share of Social Security and Medicare taxes, they get no vacation or sick pay, and if they are thinking about saving for retirement, they have to kick in 100 percent. In addition, some drivers are unhappy because Uber is able to unilaterally change the conditions under which its drivers work, generally to the detriment of the driver. Some drivers have taken Uber to court or to the National Labor Relations Board, claiming that they are being improperly classified as independent contractors, not employees under state and federal laws. Some of those cases may result in favorable rulings several years from now, but given the fact that many drivers work for Uber only a few hours a week or no more than half time, there is a real likelihood that many of them will be found to be properly classified as independent contractors.
The leadership in Teamster Local 117 in Seattle had a different idea. They decided to seek legislation that would entitle Uber drivers (and others working for other companies, including taxi companies) to engage in collective bargaining as a means of gaining some leverage with Uber. Under current law, the right to engage in collective bargaining is limited to “employees,” and the idea was to create a comparable right for Uber drivers. The union convinced the Seattle City Council, led by Mike O’Brien, to enact such a law. There was considerable opposition to the law from Uber and its competitors, as well as the business community generally. Mayor Ed Murray declined to sign the law because of his concerns of the burdens that it would place on the City to implement it, but he did not veto it, and so the law became effective on December 23, 2015.