In 2015, Seattle became the first and only city to allow its ride-share drivers to unionize. But now the union may be broken up before it holds a single bargaining session, thanks to a legal alliance between Uber and the U.S. Chamber of Commerce — joined recently by the Trump administration. The 9th Circuit of Appeals is currently deliberating Chamber of Commerce v. City of Seattle, a suit brought on Uber’s behalf by the pro-business organization. Uber and the chamber hope to label the Seattle ordinance, passed unanimously by the city council in 2015, an antitrust violation. The argument, in essence, is that the city’s coalition of largely working-class and immigrant drivers would violate antitrust rules if they were allowed to negotiate together with the ride-sharing companies that sign their paychecks. Since the drivers are classified as independent business operators, the logic goes, they would be illegally conspiring to set prices. Recently, Uber’s side got a boost from lawyers from the U.S. Department of Justice, led by an outspoken Donald Trump supporter and former aide, and from the Federal Trade Commission. The agencies filed an amicus brief late last year, and an FTC lawyer presented oral arguments last month in front of a three-judge panel. The City of Seattle, for its part, maintains it should able to set its own labor rules, and that it wants to be a “laboratory’ for testing innovative policy responses to the problems created by new technologies and the changing economy.” The appeals case, the culmination of a more than two years of legal battle, stands as an example of how Uber has cultivated support well over the heads of local officials, who are directly exposed to its operations and often most inclined to regulate it. Beyond the courts and sympathetic members of the executive branch, Uber also benefits from a sprawling army of lobbyists. Recruited from both parties, these lobbyists help enact industry-friendly transportation laws at the state level, which can make Seattle-style unionization efforts nearly impossible. Against this political backdrop, Chamber of Commerce v. City of Seattle takes on an added urgency: It underlines just how difficult it is for workers in the precarious gig economy, who generally cannot unionize, to gain any leverage over the well-capitalized platforms for which they work Uber’s battle against municipal legislation has been long, grinding, and multifaceted. It has also tended to get lost in the news cycle, even as Uber’s scandals have become increasingly explosive. Allegations that the company fostered a top-to-bottom culture of sexual harassment, that it stole self-driving car technology from Google, that it built software to evade regulatory monitoring — these charges and others have been scrupulously documented and dissected, down to how much water ousted Uber CEO Travis Kalanick drank during recent court testimony. The company’s political and legal maneuvers, meanwhile, tend to rumble below the surface. But the outcome of the Seattle case, like other slogging regulatory Uber fights, could have far-reaching implications for countless workers trying to earn a living in the app-based labor market. Seattle’s “Enterprising” Effort to Help Uber Drivers The city ordinance aims to create a framework for the city’s drivers to vote and decide if they want to collectively bargain with ride-sharing companies like Uber and Lyft over working conditions. It didn’t define these drivers as official employees. But it would set up an alternative system that recognized the unique predicament of ride-sharing drivers, sitting somewhere in between traditional salaried employees, and independent contractors who completely control their work environment. “It was an enterprising proposal,” said Charlotte Garden, a professor and labor law expert at the Seattle University School of Law who supports the ordinance. Garden stressed that the legislation would empower drivers in the city to address a range of concerns, including low wages and opaque deactivation rules. If negotiations break down, the ordinance provides mechanisms to facilitate an agreement. Either party can request arbitration, under the supervision of the city.

An economist called the Trump administration’s use of antitrust law against Uber drivers “galling.”

Uber moved quickly to fight the Seattle law on multiple fronts. It created an anti-unionization podcast, offered free pizza to drivers who showed up to anti-union meetings, and bought local TV ads critical of the Teamsters, the union working to organize drivers on the ground. One of its local subsidiaries in Seattle teamed up with the Chamber of Commerce and launched a suit shortly after the ordinance passed. The plaintiffs argued, among other things, that the city was violating antitrust rules. By allowing drivers to form an organization and bargain to set prices and working conditions, the chamber argued, the drivers were setting up what amounted to an illegal cartel. Although a district court ruled against Uber in 2015, the chamber appealed to the 9th Circuit, where it was eventually joined by the FTC and DOJ. (The FTC has not always been in Uber’s corner; last year, it fined the company $20 million for misleading drivers about pay). While the Seattle law is tied up in court, Uber drivers have not been able to convene a bargaining unit as the ordinance allows. The merits of the Seattle case hinge on a series of highly technical questions. Seattle argues that a Washington state transportation law from the 1990s, which empowers cities to regulate the for-hire vehicle industry, now authorizes the city to regulate the relationship between Uber drivers and the company. Uber and its allies say it doesn’t. The city argues that its law doesn’t interfere with federal antitrust regulations, because it falls under something known as the “state-action exemption,” a legal standard that allows elected governments, in some circumstances, to sanction anti-competitive behavior, such as price floors for drivers. This position is supported by a dozen state attorneys general, the AFL-CIO, and the National Employment Law Project. Uber and its allies disagree, and arguments by federal attorneys have focused on establishing that, between Seattle’s ordinance and the older state law on which it rests, this exemption has not been properly met. Antitrust and labor experts have come down on both sides. Marshall Steinbaum, an economist who serves as research director at the left-leaning Roosevelt Institute, called the federal government’s decision to use antitrust law to block Uber drivers from negotiating better working conditions “galling.” “Their job is to make the economy competitive,” he said. “That does not include siding with the Chamber of Commerce and Uber in a case against labor.” (When an Uber customer in New York filed a suit accusing Uber themselves of price-fixing, the FTC did not side with that customer, and the case was eventually sent to arbitration.) The top DOJ lawyer on the case, Makan Delrahim, is a Trump supporter and the president’s former deputy assistant. He was accused of politicizing the recent enforcement of antitrust rules against a communications merger involving CNN, of which Trump has been critical. (The DOJ did not respond to a request for comment.) Still, the Uber-Seattle spat is not so clear-cut. The federal antitrust concerns in the case bear some resemblance to past regulatory action, including a groundbreaking 2015 Supreme Court ruling that the FTC could enforce an antitrust order against North Carolina’s State Board of Dental Examiners, which the state had claimed was immune from antitrust law. The case went to the Supreme Court, which ruled in 2015 that the FTC had correctly identified the scheme as an antitrust violation. Christopher Koopman, the director of the Technology Policy Program at the Mercatus Center at George Mason University, wrote in an email to The Intercept that the Seattle plan in unfair because only some drivers would be allowed to bargain; the ordinance only covers longtime drivers who drive close to full time. This is an argument Uber has been making as well. Boycotts or work stoppages, Koopman argued, would be a better way to pressure Uber to improve working conditions. “A much more powerful mechanism, and one that can be used by all drivers to voice concerns, is refusing to drive,” Koopman wrote. For drivers on the ground organizing in Seattle, the lawsuit — and the federal government’s decision to side with Uber — feels like a gut punch: “To me, it looks like the government is sheltering the business class from us,” said Don Creery, an Uber driver in Seattle who is also on the leadership team of the App-Based Drivers Association, the organization leading that driver negotiating effort. Creery’s been waiting for two years for the law to go into effect, and he’s starting to despair. He’s been working longer hours to earn the same amount of money, his rent keeps creeping up too. Meanwhile, other drivers are less and less interested in getting organized. “I don’t blame them,” Creery said. “What do we have to show for it?” How Uber Cancels Local Regulations A recent report out from the National Employment Law Project and the Partnership for Working Families underlines just how significant the battle in Seattle is. It charts how Uber steadily built up one of the country’s most extensive lobbying juggernauts — in 2016, it had 370 active lobbyists working on its behalf, more than Amazon, Microsoft, and Walmart combined. The lobbying campaign helped enact statewide regulatory regimes that would preempt efforts by cities to craft their own rules governing safety issues, insurance, background checks, and, in Seattle’s case, collective bargaining arrangements. Uber and its allies have not been able to pass such a law in Washington state, which is why Seattle was able to make some headway with its collective bargaining ordinance in the first place.

“It looks like the government is sheltering the business class from us.”