A PYMNTS Company

The Case for Letting Uber Drivers Organize

 |  January 21, 2018

By Samuel Estreicher
Ride-hailing apps are surging in popularity, but the legal status of drivers who earn a living from them remains unresolved. Companies like Uber and Lyft contend that, because drivers are independent contractors and not employees under the US’s various labor and employment laws, any attempt to form unions or bargain collectively for higher wages violates antitrust laws.

Until now, that assumption has been widely shared — but it’s based on a failure to understand why concerted activity by workers is protected against antitrust liability. Labor’s antitrust shield was established by the 1914 Clayton Act, in which Congress determined that “the labor of a human being is not an article in commerce.” A two-year-old Seattle ordinance, now in federal litigation, provides an opportunity for courts to extend these century-old labor rights to workers in the digital economy.

Conventionally, only workers defined as “employees” are viewed as having the right to organize without violating antitrust laws. Individuals are considered employees only if their boss can control when and how they do their work — what is called the common law’s “right to control” test.

Under this view, people who provide their products or services directly to the public are prohibited from banding together with peers to try to raise wages and improve working conditions. For all intents and purposes, these independent contractors are considered business owners. They can form associations to share information and lobby for their interests — like the so-called Freelancers Union — but cannot form an organization that insists on collective bargaining. Allowing businesses to join together with competitors to fix prices or carve up markets, the argument goes, represents a combination against the welfare of consumers.

How should Uber and Lyft drivers be treated? Smartphone apps have enabled companies to enlist huge workforces without assuming the responsibility of controlling when and how the work is being done. Uber drivers receive no employee benefits, no right to form unions, no protection from employment discrimination, and no workers’ compensation or unemployment insurance — all because they are not statutory employees under the “right to control” test.

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