While disrupting the car-for-hire industry with itsride-sharing app, Uber created a new level of job flexibility andchoice for the people who drive for them, allowing drivers to set their ownhours and essentially be their own bosses. And now, Uber is doing somethingsimilar to the standard union model.
In early May, Uber announced it hadreached a deal with the International Association of Machinists District 15 toform the Independent Drivers Guild forNew York City's 35,000 Uber drivers.
What makes the Guild interesting is, although organized by alarge labor union, it won't look much like a typical union. The NewYork Times reported that the Guild, "wouldestablish a forum for regular dialogue and afford [workers] some limitedbenefits and protections -- but that would stop short of unionization."
The five-year agreement would allow members regularmeetings with management, an appeals process for discipline and access toseveral benefits programs such as insurance and legal services.
Even though Guild members will meet with Uber, they will notbe able to force Uber to bargain over contracts as a traditional union would.Further, no Uber driver will be required to pay dues to the Guild, as they otherwisewould in a traditional union in New York. Uber drivers could still workdirectly with the company and would not need to go through the Guild if theywanted to negotiate with management or appeal a grievance on their own.
The Guild and Uber will team up to lobby for a level playingfield on taxi sales taxes. Currently New York state law charges a 9 percentsales tax on Uber rides but there is only a 50-cent surcharge on taxicabs.
According to Uber Chief Advisor David Plouffe,rides with Uber and taxis should be taxed at the same rate. "This would notonly mean more money for drivers, it would also free up resources for a newbenefits fund administered by the Guild and used to cover benefits such as paidtime off or parental leave, for example."
While the deal is notperfect, it shows the beginning of a model that could bring unionization intothe 21st Century. It also signals that at least a few unions are takingseriously the new on-demand, independent contractor economy, which is likely tocontinue growing.
Starting with the good: almost all of the agreement betweenUber and IAM is voluntary. The agreement does not force drivers to be representedby the union, nor does it compel the company to bargain, as is standardoperating procedure with traditional unions. Instead, the agreement models a "members-only agreement," where a union in a workplace only represents theworkers who choose to become members of the union.
As a result, Uber will work with IAM but is not legallyrequired to do so. Rather, the company and the union will work together becauseit is in both of their own interest to do so. To the extent that the Guildhelps make Uber a more attractive job opportunity, it will help the company gainbetter contractors, provide better services and best its competition.
Natalie Foster, cofounder of Peers.org, a company thatprovides portable health and life insurance and retirement options for workersin the sharing economy, highlightedin a piece for CNN.com the benefits and flexibility the Guild would provideUber drivers. She says the arrangement has the "potential to be a critical steptoward a 21st century safety net for American workers' real lives today,because it could very well lead to a workable model to provide portablebenefits to gig economy workers."
The benefits of the deal for the union is that it gets thepotential of dues-paying members (IAM is not charging fees for membership as ofthe announcement) and only has to provide services to workers who are members.
Not all unions are willing to adapt to the sharing economyand embrace the voluntary approach of the Guild. BhairaviDesai, executive director of the New York Taxi Workers Alliance, toldReuters the deal was a "historic betrayal" of drivers since IAMgave up they type of mandatory association experienced by traditional unions.The Taxi Workers Alliance filed aclass action lawsuit in Federal Court in New York on June 2 toreclassify Uber drivers as employees as opposed to independent contractors.
But now for the bad in the deal: the Uber-IAM deal could openthe door for compulsory funding of the union through this newly created union-controlledbenefits fund. If Uber and the Guildsuccessfully lobby to reduce the sales tax on Uber rides, the union could fightto use part of the savings to fund itself though a mandated union benefits fund,rather than allow drivers to keep the extra earnings and choose whether or notto contribute.
Clearly the playing field should be level and taxis shouldnot be given special tax benefits in comparison to Uber or any other privatehire vehicles, so the arbitrary sales tax on Uber rides should be eliminated.But any savings should go to benefit drivers and they should decide if they'dlike to use that extra income to pay into the Guild's benefits fund.
Further, the new innovative Guild could be no more than astalking horse for a traditional union.
Jim Conigliaro Jr, general counselfor the IAM District 15, has clearlystated that if Uber drivers are redefined as "employees," his union wouldtry to organize them into a traditional union.
Nevertheless, the IAM and Uber coming to a voluntaryagreement to provide optional benefits for drivers suggests the potential startof a positive transition for the labor movement. The voluntary agreement showsthat unions no longer need to compel employers and employees into acceptingforced representation and paying forced dues in order to support themselves. Andif successful, this deal would demonstrate that unions do not need to uselegislative and regulatory action to reclassify independent contractor andsmall business owners into a one-size-fits-all category they can then organizefor the purpose of collecting dues.
If there are no ulterior motives to force unwanted representationon Uber drivers, and the plan is simply to provide a service that drivers canaccept or reject then, except for the possibility of forcing drivers tocontribute to an IAM controlled benefits fund the agreement between Uber andIAM should be applauded.
F. Vincent Vernuccio is director of Labor Policy at the MackinacCenter for Public Policy and is author of the study Unionization for the 21st Century:Solutions for the Ailing Labor Movement
