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Rideshare Drivers' Future at Stake in Seattle

Seattle’s bid to force drivers for rideshare companies like Lyft and Uber to pay union dues to the Teamsters continues apace. As we have noted before, this is an unprecedented attempt to force unionization on independent contractors, who even the National Labor Relations Act exempts from collective bargaining. The Ninth Circuit is currently considering an emergency motion, filed Monday by the U.S. Chamber of Commerce and Uber’s affiliate (Rasier, Inc.), to enjoin the City Ordinance.

As the motion for injunction alleges, the Ordinance represents an existential threat to ridesharing in Seattle, and puts drivers, passengers, and communities at risk of serious harm.

Drivers will be harmed because, under the current rules, 70 percent of Lyft’s drivers will not be allowed to vote in an election that will determine whether dues are deducted from their earnings. Nor do they get a choice of union – the City designated the Teamsters the “exclusive driver representative” under the Ordinance. The Teamsters have the power to expand the pool of eligible voters, but have declined to do so.

Moreover, the Ordinance requires rideshare companies to give the Teamsters confidential contact information of eligible drivers, including mailing addresses, e-mail addresses, and phone numbers, whether or not the drivers consent. As a result, the drivers will suffer significant harm to their privacy interests, as union representatives are not known for their reticence during union election campaigns.

Moreover, if the Teamsters win the election, they will be empowered to negotiate “minimum hours of work” for drivers, which could easily negate the attractiveness of the platform for those drivers for whom flexibility in hours is the main attraction of using a rideshare app to find customers. Driving for two or three hours for two or three nights a week to supplement income could become impossible.

This will almost certainly reduce the amount of rides available to passengers – and increase their fares as a result of supply and demand effects, well beyond the surcharge applied by the city to manage the scheme. Fewer rides also means fewer tips for drivers (Lyft’s drivers earned $100 million in tips in 2016).

Fewer rides and higher prices will have a negative effect on Seattle’s community economy at large. Surveys show that rideshare passengers visit local businesses more, go out more and stay out later, and explore new areas. In particular, rideshare companies are helping to solve the “transportation desert” problem of underserved communities like Washington DC’s Anacostia and the South Side of Chicago.

Those who believe the sharing economy has much to offer the worker as it evolves will need to keep a close eye on what happens in Seattle.