Despite strikers gaining traction and rising tensions with management, Uber drivers have found forming a sizable union or independent worker center challenging. The structure of Uber locks drivers into a software-based platform where organizing has been virtually impossible to do. Uber provides built in financial rewards for "scabs" (workers that break ranks to work during a strike) and 0 channels for horizontal communication between workers. A classic union-busting playbook in action – only it's the architecture of the workplace.
Add these such rewards to the seemingly endless list of ways Uber is bleeding money. For example, in February before and after the Super Bowl, following the unannounced rate cuts by Uber HQ, Uber offered drivers a $40/hour fare guarantee for the two hours before and after the Super Bowl to ensure a steady supply of rides. The company had paid a lot (some reports estimate as much as $500,000) for exclusive rights as the official transit provider for the event, an investment they took measures to protect. Additionally, surge pricing, in which workers are paid higher rates when there's a shortage of drivers on the road (as determined by an algorithm), financially incentivizes workers to break ranks and offer their services.
Uber maintains its drivers are independent contractors, not employees, and therefore do not have the right to unionize, although last December legislation in Seattle passed allowing drivers to do so, possibly the most aggressive regulatory move against Uber at the time.
In May, Uber struck a deal with the International Association of Machinists to form a new Independent Drivers Guild that would represent their workers. Separately, the Freelancers Union also made an agreement saying that it would advise Uber on strategies for building a nationwide portable benefits platform for drivers. While not an official union, the Guild is open to the 35,000 drivers Uber says it employs in New York. The Guild most notably represents drivers in meetings with Uber, most notably when drivers appeal Uber's decision to deactivate them, but because the Guild falls short of union status itself, Guild members are not able to negotiate matters like pay, paid time off, health insurance, or workers compensation. The drivers in the Guild are provided access to discounted legal services, life and disability insurance, education courses, and roadside assistance. Still, the benefits come with a catch: as a condition of the agreement to form the Guild with Uber, the Machinists Association promised not to try and formally unionize Uber drivers for five years or seek to have them recognized by the National Labor Relations Board as employees of the company. However, if the drivers are found to be employees at any time (including within the period of the five-year agreement, the drivers can unionize with the Machinists. This could happen as a result of a court, regulatory or legislative decision. The Machinists Association has a history of successfully organizing and unionizing black car drivers in New York City in the last twenty years.
This makes two agreements that Uber has made, one with the Freelancers Union and one with the Machinists Association, however, the possibility that regulations (following the legislation in Seattle) could fall into place requiring Uber drivers to be regarded as employees provides the loophole that all of the organizations in favor of drivers' rights need to unionize.
In other words, Uber may have "shot itself in the foot" so to speak. By forming the Independent Drivers Guild, the company has seemingly supplied its drivers with what they've been missing, the network of communication they have needed all along.
And now, next week, a group of nearly 14,000 Uber (and Lyft) drivers who have signed up to join the local branch of the Amalgamated Transit Union, according to a spokesperson, plans to rally at the NYC Taxi and Limousine Commission (TLC) headquarters to demand a formal vote on unionizing. The 14,000 sign-ups exceed the 30 percent threshold that federal regulators say must trigger an official vote, the union says. The cards signed by drivers indicate that they seek ATU membership and authorize the union to act as their collective bargaining agent.
The ATU's local 1181-1061 branch is the largest chapter of the ATU, representing more than 14,000 transit workers including drivers and mechanics throughout New York City, Westchester, and Long Island. The 190,000-member Amalgamated Transit Union represents city and school bus drivers, subway and ferry operators, mechanics and maintenance workers, among others in US and Canada.
Self-employed workers-which includes Uber drivers-who make more than $15,720 annually, are taxed at a rate of 15.3% for Social Security and Medicare. Employed workers on the other hand are taxed at half the rate (7.65%) and their employers are responsible for the other 7.65%, according to the Social Security Administration. Uber would take on this extra tax burden if all drivers are classified as employees.
To put everything in perspective, if you take the fact that the average Uber driver makes about $19.00 an hour in wages (according to data released by Uber), a driver who works 40 hours a week would make approximately $39,600 annually. At a tax rate of 7.65%, that means that Uber would have to pay about $3,000 a year in social security taxes just for that employee.