A first-of-its-kind city law forcing Uber and Lyft drivers in Seattle to become employees instead of independent contractors, in order to negotiate with a city-sanctioned union, has been temporarily blocked by a federal judge.
Seattle, Washington, would’ve been the first US city to make ride-sharing drivers union-eligible employees, but US District Court Judge Robert Lasnik granted a request by the US Chamber of Commerce to halt enforcement of the ordinance on Tuesday.
The chamber, which includes member companies Uber and Lyft, sued Seattle over the ordinance, claiming it violated federal antitrust laws. Judge Lasnik has not made a final ruling in the case, but he concluded that preventing implementation of the ordinance during the course of the trial harmed no one.
Lasnik also did not state one way or another if the city law was in line with Washington state law.
“The potential absence of any state oversight of the agreements, the lack of any evaluation of competitive effect, and the potential impact on an important transportation option for thousands of Seattle residents and visitors cannot be ignored,” he wrote. “The Court finds that the Chamber has raised serious questions.”
Seattle’s ordinance specified The Teamsters as the union to negotiate with the drivers, and that required Uber and Lyft as well as other ride-sharing companies to turn over confidential driver lists to the union, which the judge considered “likely to cause competitive injury that cannot be repaired once the lists are released” as well as a threat to the business model itself.
The Teamsters represent taxi companies upset by the rideshare phenomena, which the judge acknowledged “created havoc in this industry using a business model that simply did not exist before its recent technological development.”
Seattle spokeswoman Kimberly Mills said in a statement: “The city has a motion to dismiss pending, and will move forward with efforts to defeat this legal challenge to its effort to improve the safety and reliability of for-hire transportation in the city.”
“The city is also encouraged that the court did not find merit in the challenges to the ordinance under federal labor law,” she added.
Brooke Steger, a general manager for Uber, said: “The court recognized the complexity of the issues and the imminent risk to drivers, transportation companies, and the people of Seattle if the ordinance were allowed to proceed without careful legal review.”
The case, Chamber of Commerce v. Seattle, 17-cv-00370, is being litigated in US District Court for the Western District of Washington in Seattle.
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