Uber’s “Immoral, illegal, unconscionable company union”.
They called it the ‘Independent Drivers Guild’—but the new organization for New York City’s estimated 35,000 Uber drivers is “independent” in name only. Co-founded by Uber and the Machinists union, it’s not a union, has no collective bargaining rights, and receives financial support from Uber. Just how much support it receives is unknown, since Uber and the Machinists refuse to release their agreement—not even to their drivers.
If the shroud of secrecy isn’t enough to raise your eyebrows, consider who’s heaping praise on this cozy new partnership. The Mackinac Center—a Koch-backed anti-union mouthpiece that pushed for “right to work” in Michigan—calls it a “model that could bring unionization into the 21st century.”
So, what will it do? The Guild claims to give drivers a process whereby they can appeal any terminations (which Uber calls “deactivations”). Ten union-selected drivers will attend monthly meetings of a “works council.” According to Jim Conigliaro, general counsel and business representative for Machinists District 15, “it’s an opportunity for drivers to sit across the table from Uber management and discuss issues related to pay, dispatch procedures, and paid time off.” He also said, “there are no obligations on either side to come to an agreement. It’s just a discussion.”
Bhairavi Desai heads the New York Taxi Workers Alliance, a worker center that represents 19,000 drivers in the city and has a more critical view of the new organization. According to Desai, the Guild is an “immoral, illegal, unconscionable company union.” Until the 1980s, yellow taxis in New York City were dispatched via car radios. Drivers were considered employees, and many were unionized. Then two things happened. First, the radios were removed, with taxis relying exclusively on street hails. Second, garages moved from a system of commissions—where cab companies took a cut of fares—to leases, where drivers paid to use cabs and taxi licenses. Cabbies became independent contractors, and their unions were broken. Without the right to unionize, the Taxi Workers focused on local regulations, such as pushing for raised fares to ensure that drivers can earn a livable wage. Further, the organization has fought to reduce lease costs.
Now, along comes Uber, with all the hallmarks of the employee system. It sets driver fares, controls dispatches, and takes a commission. However, Uber claims that its drivers are independent contractors. For the company, “it’s the best of both worlds,” says Desai. This dodge allows Uber to weasel out of Social Security and Medicare taxes, and to cheat drivers of any legal guarantees to minimum wage, overtime protections, health insurance, workers’ compensation, and the right to organize and bargain collectively. The truth is, Uber’s astronomical valuation of $68 billion shouldn’t be chalked up to its innovative app so much as to its success at skirting regulations and employment laws. If Uber drivers were reclassified as employees, Fortune estimated that the combined costs to Uber would top $4 billion a year. An army of lobbyists and lawyers make it all possible. Uber employs one-third more of these influence-peddlers than Walmart.
As part of their agreement, the Machinists dropped the issue of driver misclassification. “We don’t comment on whether or not they are properly classified as independent contractors or employees,” said Ryan Price, director of the Guild. Before the creation of the Guild, the Taxi Workers and Machinists were planning a joint campaign to organize Uber drivers in New York. “What we didn’t know was that, behind the scenes, they were engaging with Uber to sell everyone out,” said Desai.
Undeterred, the Taxi Workers are continuing to challenge Uber in multiple areas, pressing courts and regulators to rule that the drivers are employees. If they were to do so, this move would likely render the Guild illegal, as a “company-dominated labor organization.” The Machinists call their deal with Uber “groundbreaking” and are trying to transport the model to Philadelphia. But it looks like Uber is taking the union for a ride, basking in positive press while maneuvering workers into meetings where they have no leverage or possibility of building power.
The Guild will never transform Uber’s business model. At best, such secret agreements and partnerships with management are doomed strategies. At worst, a defanged union becomes a partner in exploitation.
This article has been edited and updated, adding the quote from Price and making clear that the union has dropped the issue of misclassification.