Discussion Board Post

Business Finance

In 500 words answer the following questions using the article below:

  1. Who has the most leverage in this negotiation between uber and its drivers?
  2. Assuming that unionization occurs, will riders be willing to pay the extra costs or possibly do you think that Uber’s profits will go down and fares will stay the same?

Uber Fights Unionization

Ride-hailing firm urges its app-based drivers in Seattle to remain as business ‘partners’


Before accepting rides on his Uber app each day, Seattle driver Fasil Teka must first choose whether to listen to company-run podcasts on voting rights, collective bargaining and city council hearings.

He and other drivers in the city have received text messages, meeting invites and phone surveys from ride-hailing firm Uber Technologies Inc. in an attempt, the company says, to sway them against unionizing.

Mr. Teka said he isn’t persuaded. “Uber is telling us they don’t want us to join a union,” the 41-year-old said, one of Uber’s 1.5 million “driver partners” as the company calls them. “Uber also tells us we’re their partners, but they don’t treat us like we are partners.”

Uber is squaring up for a long fight in Seattle to block the nation’s first real unionization effort for app-based drivers, pitting it against the Teamsters labor union and Seattle’s city council. Uber says a union threatens the freedom of its drivers to work as much or as little as they wish and, moreover, isn’t something its drivers want.

“We continually seek to incorporate driver feedback on how their experience can be improved,” said Caleb Weaver, head of Uber’s public policy in Washington state. “At the most fundamental level in this business, we don’t succeed unless drivers succeed.”

In a series of podcasts, Brooke Steger, Uber’s general manager for the Pacific Northwest, interviews drivers about how they would be affected by a union, concluding that it isn’t in their best interests.

“It’s totally impossible to know how the ordinance could limit who can drive, when you can drive and where you can drive, as well as what you might be required to pay in union dues,” Ms. Steger says in one podcast.

The Seattle tussle is the latest challenge to Uber’s independent contractor model, which pushes expenses such as fuel, vehicle maintenance and insurance on to the drivers, in exchange for the promise of a steady stream of riders and a flexible work schedule. The model is a chief reason for Uber’s $68 billion valuation, though the company has faced a near-constant stream of lawsuits challenging the classification as nonemployees.

A Seattle ordinance passed in 2015 took effect in January giving drivers the right to vote to organize, meaning some 10,000 Uber contractors could win the right to negotiate fares and benefits. The dispute has taken on added urgency in recent days as the Teamsters seek access to driver contact information from Uber and rival Lyft Inc. to help with organizing efforts, even as lawsuits challenging the ordinance roll in, including from the U.S. Chamber of Commerce and a group of 11 drivers backed by the National Right to Work Committee.

Meanwhile, Uber has been buffeted by sexual-harassment claims by a former engineer, a lawsuit from Alphabet Inc. alleging the theft of trade secrets, and a video leak showing Chief Executive Travis Kalanick berating a driver.

The company says a union could threaten drivers’ freedom and has suggested it may leave Seattle if a union forms. Union advocates say it would deliver more consistent wages and working conditions, and help prevent Uber and Lyft from implementing sudden fare changes or shutting off drivers’ apps.

“The Seattle model has great potential to spread to other progressive cities,” said Charlotte Garden, an associate law professor at Seattle University who has studied the Uber case.

Teamsters organizers in the San Francisco Bay Area say they are closely watching Seattle for lessons that could be applied to Uber’s hometown, one of its largest global markets.

Uber says a union could threaten the freedom of its drivers to work as much or as little as they wish. A February protest in New York.