A newly created association will grant some benefits to New York City's 35,000 Uber drivers, the ride-share company announced Tuesday, a compromise to offer some protections while stopping short of unionization.
The Independent Drivers Guild, which will be affiliated with a regional branch of the International Association of Machinists and Aerospace Workers union, is the first of its kind that Uber has officially sanctioned – but not the first that frustrated drivers have attempted to forge. Various independent drivers groups exist across the country.
Uber's decision to recognize the guild comes amid mounting pressure from drivers concerned that their status as independent contractors, not employees, leaves them vulnerable without protections such as minimum wage or overtime. The company has previously agreed to various deals to keep drivers satisfied, but is dedicated to the independent contractor model and preventing drivers from unionizing.
The new agreement with New York Uber drivers is good for five years. Drivers who are members of the Independent Drivers Guild can have meetings once a month with Uber officials in New York, and can appeal the company's decision if it bans them from the app. They will also be eligible for discounts on life insurance and vehicle or roadside assistance, and can receive benefits such as time off and retirement savings.
The association is not a proper union, however, so it cannot collectively bargain a contract. Uber alone will still determine contracts, fares, benefits, and protections, albeit with input from drivers, and the machinists union will not try to unionize Uber drivers or encourage them to strike.
Uber said it hopes the agreement will improve its rapport with drivers, many of whom are frustrated over cuts in fare.
"Communication is important," David Plouffe, Uber's chief adviser, told The New York Times. "On price cuts, we haven't always had the best forum to discuss and share data – how price cuts work, what we see afterward."
The formation of the association follows Uber's expansion into new markets and its struggles with already existing ones. Both Uber and its competitor Lyft were forced to suspend their services in Austin, Texas, after city council voted down regulations related to drivers' background checks, including fingerprinting. Uber also has pending legal settlements with drivers over labor disputes in California and Massachusetts.
The new association could not only improve Uber's relationship with its drivers, but also help save money for the company. Under the agreement, the machinists union will help Uber lobby New York to treat all taxi vehicles equally for tax purposes. Currently, the state applies a 9 percent tax on black car rides, including Uber, a rule that does not apply to the yellow taxis.
The consequences may carry beyond ride-sharing into the expanding "gig economy" of workers often classified as contractors, rather than traditional employees.
"This is important not only for the gig economy, but because you might have a new kind of labor organization coming out of this," Eli Lehrer, the president of libertarian think tank the R Street Institute, told The Washington Post.