Seattle’s city council approved legislation allowing drivers of ride-hailing services like Uber Technologies Inc. and Lyft Inc. to unionize, giving them the ability to negotiate their pay and working conditions.
Drivers for Uber Technologies Inc. and Lyft Inc. celebrated the council’s unanimous approval of the new law on Monday, the first time a U.S. city has opened the door for unions of ride-hailing drivers.
The push to unionize drivers in Seattle was led by the App-Based Drivers Association, a local group representing hundreds of drivers for Uber and other services, as well as Seattle Teamsters Local 117.
“Drivers are now able to have dignity and respect,” Dawn Gearhart, a spokeswoman for Teamsters Local 117, said. “They’re part of a conversation that they weren’t a part of before.”
Ms. Gearhart said drivers for taxi-hailing services in Hawaii, Connecticut, Kansas, North Carolina and New York inquired about pushing for their own legal reforms in the wake of Monday’s victory.
In emailed statements, spokespeople for Uber and Lyft said their services provide flexibility to drivers that is not afforded to full-time employees.
“Unfortunately, the ordinance passed today threatens the privacy of drivers, imposes substantial costs on passengers and the city, and conflicts with long-standing federal law,” a spokeswoman for Lyft said.
It is unclear if the ordinance will hold up against expected legal challenges. Uber and Lyft say federal law prohibits independent contractors from collective bargaining. Both companies consider their drivers independent contractors rather than employees.
The rapidly growing business of connecting drivers to passengers on a smartphone app has often put Uber and Lyft at odds with the drivers on which they rely. Uber drivers have complained, for instance, that the company raises and lowers their portion of fares with little notice. Uber declined to comment on driver complaints.
Earlier this month, a California judge ruled to expand a class-action suit brought by three drivers who claim they are Uber employees, not contractors, and therefore deserve benefits such as workers’ compensation.
Continuing to classify its drivers as contractors may harm Uber’s chances of challenging Seattle’s new measure, said Reuel Schiller, a professor of University of California’s Hastings College of the Law.
Federal labor law prohibits states and cities from overriding its protections for employees, but not independent contractors, Mr. Schiller said. “If a state wanted to create a regime where independent contractors are able to unionize, there’s nothing in the National Labor Relations Act that would stop them from doing that,” he said.
On the other hand, ride-hailing services could argue that letting drivers form unions could raise antitrust concerns, since it might enable price-setting by thousands of contractors, each operating as independent businesses, Mr. Schiller said.