A legal fight that dragged on for years over Seattle’s novel law allowing Uber and Lyft drivers to unionize has come to an end for now after the city, U.S. Chamber of Commerce and Uber subsidiary Raiser LLC agreed to dismiss the case.
The law, passed in 2015, allowed drivers for ride-hailing apps to organize, unusual because the companies consider drivers independent contractors rather than traditional employees. The U.S. Chamber of Commerce challenged the law in court, and the Seattle City Council later removed provisions from the law allowing drivers to negotiate over pay if they organized.
Meanwhile, Mayor Jenny Durkan and the City Council moved on last fall to a different set of driver-focused laws, promising a new minimum wage for drivers and other protections.
Uber and Lyft indicate they do not plan to sue over those new laws or seek to overturn them with a ballot measure, assuming cooperation with the city.
“We will continue to support the City’s goals and expect with industry and the City working cooperatively, we will avoid the need for any further challenges to the ordinances, whether legally or through a local or state ballot measure,” Uber said in a statement Friday provided by the city.
“We expect to be able to work cooperatively on a sustainable future for the industry,” a Lyft statement said, “and as long as that’s the case there should be no need for further legal or ballot challenges to the Fare Share ordinance.”
“Fare Share” is the branding Durkan’s office gave to a package of laws passed last year to create a new resolution center for drivers, set new rules about driver deactivations, lay the groundwork for a minimum wage for drivers and establish a new per-ride fee on ride-hailing trips.
As the city council considered the new legislation last fall, Uber and Lyft argued against some aspects of the plan and it was unclear whether they would attempt to overturn it through a lawsuit or ballot measure.
The minimum pay law set as city policy that Uber and Lyft drivers should make at least Seattle’s minimum wage for large employers, about $16 an hour, plus expenses. But the city first planned to further study driver pay and hired two economists for the study. The law set a deadline of May 1 for the mayor to send the City Council legislation for a minimum wage. It’s not yet clear if that timeline will be disrupted by the novel coronavirus pandemic.
Separately, the city council passed a new fee on Uber and Lyft trips at the same time it passed the new driver protections. The new per-ride fee on Uber and Lyft trips will total 57 cents, but because the city also reduced a different, existing fee by 6 cents, the new charge is effectively 51 cents.
The fee is set to take effect July 1 and the revenue is planned to be used for affordable housing, the planned downtown streetcar and a new driver resolution center. However, the coronavirus outbreak has likely significantly reduced Uber and Lyft trips and it’s unclear when demand might return.
It’s unclear whether drivers will seek to unionize under the original law. Teamsters 117, the union that backed the ordinance in 2015, said in an email drivers “moved on” to backing the new protections while the legal fight played out. “We will continue to fight to implement the law, raise driver pay, and bring new levels of protections and representation to the driver community through the Drivers Union affiliated with Teamsters 117,” the union said.
The Seattle City Attorney’s Office said the city “appreciates and applauds cooperation and support” from Uber and Lyft.