Sharing Economy

Uber Drivers Cannot Unionize, Says National Labor Relations Board

A memo says the drivers are contractors, not employees.

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Uber drivers are contractors, not employees, according to a memorandum from the National Labor Relations Board (NLRB), striking a blow to union organizing efforts among ride-hailing operators.

The memo, written by NLRB General Counsel Peter B. Robb, states that drivers are free to set their schedules and work for competing companies, which means they are not employees under federal labor law. While the ultimate decision falls under the purview of the NLRB's regional director, they typically adopt the advice of the board's general counsel.

Robb's memo concurs with a letter the Labor Department released last month that classified gig economy workers similarly.

The NLRB's final ruling will apply only to union rights. It will not affect the slew of lawsuits brought against ride-hailing companies in pursuit of higher wages and overtime protections, among other demands. And it likely won't placate the Uber and Lyft drivers across the country who went on strike last week, urging that companies provide the benefits they grant to employees.

"Drivers are at the heart of our service─we can't succeed without them─and thousands of people come into work at Uber every day focused on how to make their experience better, on and off the road," said a statement from Uber in response to last week's driver strikes. The company added that it is committed to providing "more consistent earningsstronger insurance protections, [and] fully-funded four-year degrees for drivers or their families."

Experts estimate that labor costs would increase between 20 and 30 percent if ride-hailing companies were forced to reclassify all of its workers as employees and provide them with health care and adhere to minimum wage laws. Those costs would likely be passed on to riders, upending a business model centered around providing affordable alternative methods of transportation. It would also trigger driver layoffs, making ride-hailing work an exclusive profession.

The popular companies are facing increased pressure to cut costs as they court investors with their recent public offerings. Currently, Uber and Lyft are hemorrhaging money; the former lost nearly $2 billion in 2018, while the latter lost $1 billion. Those numbers won't improve with mandatory employee benefits for millions of workers.

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  1. No doubt if they unionized they would price themselves out of a labor market, but freedom of association should allow for bad groupthink.

    1. Nice that you mention free association. It’s a visit to the grave of a long lost but cherished personal freedom. Requiescat In Pace.

    2. Yeah, I can buy that they are contractors, but why shouldn’t contractors be free to form a union? And if they do, Uber and Lyft should be free to say “We aren’t going to contract with you anymore” and see if they can still attract enough drivers. Just let it all play out.

      1. Uber and Lyft should be free to say “We aren’t going to contract with you anymore”

        That’s the problem—once they are a recognized union, then the companies are NOT free to deal with them or not as they wish. They have to follow all the laws and regulations dictating how unions and employers must deal with each other.

        1. I suspected as much. I’m not well versed on labor laws. I have nothing against unions in principle, and in fact I think they could and sometimes even do act as an important counter balance to “management’s” interests. But freedom of association needs to work both ways, and companies need to be free to choose if they want to work with unions or not.

          Oh well.

      2. If I understand the memo’s reasoning correctly, it’s not that the contractors can’t form a union, it’s more that, if they were to form something like a union, they wouldn’t be able to invoke the whole regulatory framework that protects their right to do so, requires Uber to negotiate with them, etc.

        They get to “unionize” in the sense that libertarians are generally comfortable with, in other words. Try it and see how it works for you.

        1. As far as I know, unfortunately the combination of federal and state labor and antitrust laws would work against them. They could form a wildcat union, but then they couldn’t strike legally, as they would be an illegal combination acting in restraint of trade.

          That’s the trouble with labor law: Everything’s either required or forbidden. In response to labor violence beginning in the 19th Century, governments pretty much all over the world declined to enforce laws against violence, or to enforce them equally, and instead decided to manage employer-employee relations. And in the USA now, where the power of organized violence by wildcatters would be insignificant, we’re stuck with a large legal esatblishment stemming from those days.

      3. What I don’t get is that there is a very famous and well known history of this. Notably, acting. Almost every part of the Hollywood system has one of the many guilds representing their people. However, an entire cast and crew is typically built from scratch on every project as all their people are contractors. This is clearly a similar situation.

      4. Anyone can form a union.

        The reason the NLRB is important here is they have the privilege to decide which unions the government will kill people to ensure that that union is the sole negotiator.

        Otherwise, if you formed a union, the contractee is free to tell them to pound sand. And you are, of course, free to not contract with anyone that won’t negotiate with your designated negotiator.

        But free doesn’t cut it in today’s world. These people want to use violence to ensure that contractees are required to go through their designated negotiator.

        And that negotiator wants to use violence to ensure their place as the only legal negotiator for the contractor.

        1. “Anyone can form a union.
          The reason the NLRB is important here is they have the privilege to decide which unions the government will kill people to ensure that that union is the sole negotiator.”

          A union has the power of a union of workers, until the NLRB decides it has the power of the federal government, unto whom we all bow.
          Unions are now an arm of the federal government.

    3. They can form the equivalent of a trade association.
      But the basic fact is that they do not really want to be independent businessmen. They just want someone else to provide an income without effort on their part.

      1. Well, driving around all day requires effort. And from their financial statements, Uber is undercharging by at least 10 to 20 percent.

        1. No one forces them to drive for Uber.

    4. Damn straight, Fist. This is a why I have a semen-stained collage of your posts as my pillow case.

      1. I knew you were a Crusty sock.

        1. Crusty actually has principles; I do not.

        2. He didn’t mean an alternate account for Crusty, he meant you were a crusty, semen-stained sock.

          1. Oh.
            Thanks for the compliment, Unicorn-babe.

    5. Exactly. What business is it of the government to tell people they can’t organize. As a part time Uber driver, I welcome these chuckleheads depleting the supply of competition

      1. They’re not, as I understand it, being told they can’t “organize”.

        They’re being told that the government won’t have their back if they do, that Uber will be free to ignore the union they form, and just hire new drivers. Just as they’re free to go off and find jobs someplace else.

        Which is, frankly, the way it always ought to be with unions, so this was a very libertarian ruling.

        1. Unfortunately it’s not only that. If they organize and try too hard to exercise their power in combination by concertedly withholding their services and agreeing to uniform terms of employment, state and federal government will enjoin them under anti-trust laws, and can even jail them for contempt of court if they don’t “return to work” — except for those of them who get out of that business entirely. For you see, the laws on organized labor were made as exceptions to both federal and state laws against combination in restraint of trade. You get to unionize under such-and-such terms designed to give a government-defined group of workers or potential workers a collective say, but only under those terms. The employers then are compelled by law to deal with that group as a group. In broad terms in labor law, everything is either compulsory or forbidden.

  2. Of course they are not employees. How is this even debatable.

    1. Democrats.
      Facts optional.

    2. It’s debatable because SHUT YOUR FACE!!!

      /Progressives

    3. Yeah, this was a no-brainer.

  3. And what percentage of Uber/Lyft drivers are demanding unionization and all that comes with it?

    Of these Uber/Lyft drivers, how many are actually union cabbies who joined as drivers specifically for this purpose?

  4. These idiots do realize that Uber, Lyft, and their ilk are bleeding money, right? Higher wages and benefits would kill these companies, and everybody would lose their job as a result.

    1. Think about it, YT. How many times have you heard of a company losing money and the unions saying it’s all management’s fault and the rank and file should get more?

      1. I lost count somewhere around 10K.

      2. To be fair, management incompetence is in fact a very common reason for companies to lose money.

        1. Yes, that is fair. I was thinking more of economic forces weighing on a company’s profits.

        2. So are excessive pay rates due to caving in to irrational union demands too easily.

      3. I’m trying to think about it, man, but I only think with my penis. So I’ve come to the conclusion that you and I should go out and find some hot union thugs to fuck.

    2. The drivers and employees should work for nothing, thereby ensuring the company’s existence.

      1. Progs would bring that system back if they could.

        1. You’re the one bringing it back SLAVER!

          1. ohlookafuckingprogmoron.

            Free trade isn’t slavery. Contrary to what you’ve been told to believe.

      2. They will, when the cars become self-driving.

    3. Uber is losing $1B a quarter. I simply cannot fathom why people let them set so much money on fire.

      1. Well, because they think they will get that money back, somehow…
        In the, what, 10 years between today and the day that fully automated cars put Uber out of business, Uber is going to go from losing $10 million a day to making that amount.

        1. Automated cars won’t put Uber out of business – they’ll remove a major cost item.

          Once automated cars are on the market, Uber – if it still exists and doesn’t succumb to ‘fail-blazing’ – will have the infrastructure in place to connect owners of automated vehicles with passengers.

          This will help offset the cost of owning your own vehicle by making it easy for you to turn it into a productive piece of capital during the times when you’re not using it yourself.

          I wonder how long socialism will last once everyone realizes that everyone is a capitalist already.

          1. Yeah, that idea will last about five minutes, which is how long it’ll take for the first driverless car to get trashed by the rider while the car’s owner is sitting in a business meeting.

            1. This plus sketchy real world driving conditions is why it will be really hard to ever fully automate rideshare. It might be OKAY in Arizona year round for simple trips down the highway… But in the middle of winter, surrounded by snow, ice, road construction, and drunk people in Chicago in winter… Not so much.

          2. When AI is smart enough to drive a fleet of cars, it will be smart enough to write a new app for calling self-driving cars.

          3. “Once everyone realizes that everyone is a capitalist already”

            That is so true. I do not know why people do not get that.

            And nobody owes you anything.

            Those two ideas can set you free.

      2. For the same reason they did with Amazon and Google.

        Growth companies are going to burn through cash. They are going to do so for years. Some of them will burn out, some will become amazingly profitable. But for years they will run at a loss.

        1. Google made a superior search engine though, and grew through network effects.
          Amazaon made a superior online marketplace, and grew through network effects.
          Uber made a superior taxi calling app, but it was already easily copied by Lyft. There will be other copiers.

          1. Sure but you can succeed even with competition.

            Disney is starting a streaming service. You might think that is nuts as the market is saturated. It does not have to compete against Netflix because it has all of this great content to offer. Many people will buy it on top of other services. They can cooperate in some cases.

            It is all about producing new content down the road. Netflix does but the Disney portfolio is Disney, Pixar, Lucasfilm, Marvel, Fox. Now Hulu. That is a whole lot of talent they burned through cash for. Now they will have a platform.

            I can get pizza from papa johns or Pizza Hut. Both can and have succeeded.

    4. There is a credible theory that the drivers who are agitating for a union are traditional cabbies who signed up for Uber or Lyft with the intent of sabotaging it.

      1. Credible and probable. I mentioned it upthread.

    5. To be fair the Uber, etc drivers are bleeding money too and they would be better off losing those jobs.

      1. “To be fair the Uber, etc drivers are bleeding money too and they would be better off losing those jobs.”

        They are welcome to leave any time, you idiot.

      2. These aren’t ‘jobs’. Drivers have an app they turn on that allows them to accept ride requests. This app can be activated or deactivated at will. If these people want jobs as drivers then they should get the requisite license endorsement and seek employment as cabbies, limo drivers, etc..

        That is not what this is, and people need to stop trying to turn it into that which it is not.

  5. The company added that it is committed to providing “… fully-funded four-year degrees for drivers or their families.”

    Uh, huh. Why not doctorates?

    1. I don’t know, maybe they’re trying to help them, not make them unemployable?

      1. “Sorry, Doc. You’re overqualified to be an Uber driver.”

  6. Contractors, sure, but what’s to stop them from writing their own app to coordinate sick days (or hours)? Call it the Ride Hail Contractors Association or somesuch. Since they’re not employees, they can turn off their availability whenever they want to.

    1. There are lots of things they could legally do as such an association, but the ultimate threat of turning off their availability in coordination would be off limits to them as a restraint of trade.

  7. […] Uber Drivers Cannot Unionize, Says National Labor Relations Board Reason […]

  8. I’ve been doing Ride-Sharing full time for almost a year now and I will say that Uber/Lyft are trying to have their cake and eat it too. They want to classify us as Contractors (which I like), but they in turn have policies like telling drivers like me (who has a CCW and lives in a Castle Doctrine state) we cannot have our legally owned firearms in our OWN CAR when we’re driving. Note, for those that didn’t get that: they are treating us like an employee driving around in a company vehicle.

    As for them hemorrhaging money, that isn’t surprising. Their business model is unsustainable as its too top heavy. There are competitor apps that are gaining market traction and they’re gonna start bleeding away drivers as many of them give us 100% of the fare in exchange for a weekly subscription fee from the drivers. The drivers will go where they can earn the best money.

    1. I could argue that, in a sense, when you are driving an Uber passenger you are in the customer’s space that you have leased to them – rather like you entered a office building to repair drywall and the management who leased the space had a “no firearms” policy. In this case though, the end user (the passenger) farmed out the setting and enforcement of the “no firearms” policy to a third party (Uber) or the landlord imposed such a policy on its leased office space.

  9. […] Contractor v. Employee conundrum carries on. […]

  10. One of the things I find hilarious is all the talk about how they can never be profitable… They could literally just tack on a $1 per ride flat charge and be profitable tomorrow, if you look at their numbers. They might lose a few rides, but most people wouldn’t even bat their eyes.

    The biggest bunch of stupid in this situation is Uber and Lyft are both selling themselves too cheap in some misguided effort to completely crush their competition… They’ve both made it, and are major companies now… They just need to BOTH raise their prices a hair, and they can compete on other fronts. McDonalds and Burger King both exist… It would be like Burger King deciding to run a loss to try to force MCDs out of business or something… It’s never gonna happen, and it doesn’t NEED to happen either.

    Idiots.

  11. I wonder how the driver’s would feel if the company started treating them like employees in other ways, such as setting their schedules, dress codes, assigning routes and areas, and firing them if they don’t want to comply with these changes

    1. Uber does in fact do most of what you said. They demand clean cars and personal appearance and they penalize drivers for not accepting rides.

      1. “Uber does in fact do most of what you said. They demand clean cars and personal appearance and they penalize drivers for not accepting rides.”

        Uh, no, they don’t. Try reading, if you are capable of it.

        1. Yes and no. As drivers are suer rated, a driver with poor hygiene/appearance and a dirty car will tend to be low rated and riders will likely pass on them. Uber in particular says that they may choose to discontinue contracting to a driver that passes on too many ride requests.

          1. So basically, all no. Riders demand clean cars and personal appearance.

            The “discontinue contracting with a driver that passes on too many requests” sounds to me like deciding to call a different babysitter when the kid who was doing it gets a social life and starts saying no every Friday night. I’m not “firing” him by taking my business somewhere else.

  12. The reason the NLRB is important here is they have the privilege to decide which unions the government will kill people to ensure that that union is the sole negotiator.

    Otherwise, if you formed a union, the contractee is free to tell them to pound sand. And you are, of course, free to not contract with anyone that won’t negotiate with your designated negotiator.

    But free doesn’t cut it in today’s world. These people want to use violence to ensure that contractees are required to go through their designated negotiator.

    And that negotiator wants to use violence to ensure their place as the only legal negotiator for the contractor.instant approval blog commenting sites list

  13. If they were to unionize they would be outcompeted by the next start up replacing Uber.

  14. […] the Labor Department released last month that classified gig economy workers similarly,” notes Reason‘s Billy […]

  15. it likely won’t placate the Uber and Lyft drivers across the country who went on strike last week

    Suspending a voluntary, nonbinding relationship for a day is hardly a “strike.”

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