Uber and Lyft are facing a legal wall in Seattle, where the city council recently voted to give collecting bargaining rights to ridesharing drivers.
The city council, controlled by Democrats, voted 8-0 to pass the measure.
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The law might be illegal, but if it holds, the biggest losers as a result of unionization are riders and the drivers themselves, according to Economics 21.
The appeal of working as an Uber driver comes from work flexibility. Job satisfaction is high, even though Uber doesn’t provide benefits.
“Rather than embracing promising developments that promote entrepreneurship, many politicians call for a return to the manufacturing “golden age” of the 1950s—and the high unionization rates and inflexible workforce that accompanied it,” Jared Meyer wrote for Economics 21.
The Seattle City Council declared their legislation would “give drivers a voice on the job” in a self-congratulatory press release. Without the council’s “innovative bill,” drivers would be left at the mercy of Uber.
To explain why the law was needed, the council said that Uber’s business model “undermines Seattle’s efforts to address income inequality and create opportunities for all workers.”
“This bill was only introduced out of necessity after witnessing how little power drivers themselves had in working for a living wage,” Councilmember Mike O’Brien said.
That is not to say that Uber has not done anything ethically questionable, but the actions of the Seattle City Council will limit economic opportunity for Uber drivers while driving up prices for riders.
An Uber-commissioned study on Uber pointed to high job satisfaction from Uber drivers. Though the study should be met with skepticism, it’s still a revealing look that points toward Uber drivers being happy with Uber. With Seattle unionizing drivers, that can cut into their earnings, and drive marginal drivers out altogether. That will make the network weaker, giving riders fewer options.
Even with the legislation, strong unionization for Uber drivers might not happen. A longer process will be needed, and drivers would need “to work at least 80 percent of what full-time employment would be,” according to Buzzfeed. Though many drivers work much less than that, a successful unionization drive could push out the marginal Uber drivers and favor the drivers who work close to full-time hours.
If that happens, Seattle could become the first city to defeat Uber, to the detriment of drivers and riders who wanted a flexible and affordable alternative to taxi monopolies.
