Uber announced an agreement on Tuesday with a prominent union to create an association for drivers in New York that would establish a forum for regular dialogue and afford them some limited benefits and protections — but that would stop short of unionization.
The association, which will be known as the Independent Drivers Guild and 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 blessed, although Uber drivers have formed a number of unsanctioned groups in cities across the country.
“We’re happy to announce that we’ve successfully come to agreement with Uber to represent the 35,000 drivers using Uber in New York City to enhance their earning ability and benefits,” said James Conigliaro Jr., the guild founder and assistant director and general counsel at the International Association of Machinists District 15, which represents workers in the Northeast.
The agreement is Uber’s latest attempt to assuage mounting concerns from regulators and drivers’ groups about the company’s labor model, which treats drivers as independent contractors. That model helps Uber keep its labor costs low, but it excludes drivers from coverage by most labor and employment laws, such as those that require a minimum wage and overtime.
That has spurred public disagreements, and many drivers have organized in unofficial groups to gain more rights. The prospect of unionization has loomed at times; lawmakers in Seattle voted last year to approve a bill allowing drivers for Uber and other ride-hailing apps to form unions.
In response, Uber, which is based in San Francisco, has been striking deals to tamp down the problems — with the proviso that the company be able to continue classifying its drivers as contractors and stop short of allowing drivers to unionize.
Last month, for example, Uber reached a settlement in a prominent class-action lawsuit with drivers who had contested their contractor status. Under the settlement, the company agreed to pay as much as $100 million and put less pressure on drivers to a
Uber faces other labor-related hurdles. Along with Lyft, a competing ride-hailing service, the company this week withdrew operations from Austin, Tex., after losing a battle with the City Council over the nature of its background checks for drivers.
Under the terms of the deal in New York, which will be in effect for five years, a group of drivers who are guild members will hold monthly meetings with Uber management in the city, where they can raise issues of concern.
The drivers will be able to appeal decisions by Uber to bar them from its platform, and can have guild officials represent them in their appeals. In addition, they will be able to buy discounted legal services, discounted life and disability insurance and discounted roadside help for problems they encounter while driving.
Yet unlike a traditional union, which contractors typically cannot form, guild members will not be able to bargain over a contract with the company that would stipulate fares, benefits and protections. Uber will continue to determine most of these elements unilaterally, albeit with more input from drivers.
The machinists union has also indicated that for the duration of the five-year agreement, it will refrain from trying to unionize drivers, from encouraging them to strike and from waging campaigns to have them recognized as employees rather than independent contractors.
“It’s important to have immediate assistance in the industry and this is the structure that provides that,” said Mr. Conigliaro.
He emphasized, however, that drivers did not waive any labor rights by joining the guild, and that if Uber drivers were found to be employees at any point during the agreement, the union could try to unionize the drivers at their request.
Uber said the agreement would help smooth relationships with drivers, whose frustrations have grown with recent fare cuts and policy changes .
“Communication is important,” said David Plouffe, Uber’s chief adviser. “On price cuts, we haven’t always had the best forum to discuss and share data — how price cuts work, what we see afterward.”
Mr. Plouffe said that as a result of discussions with drivers in certain parts of the country, Uber had adopted a number of changes, like a pilot program to charge riders when a driver has to wait for more than two minutes.
With the agreement, Uber also wins an ally in its effort to change the New York State law that levies a nearly 9 percent tax on black car rides but that does not apply to taxis. (There is a 50-cent surcharge on yellow taxi trips.) Uber says the law unfairly singles out parts of its service. Under the terms of the deal, the machinists union will help Uber lobby the State Legislature to treat all hired vehicles equally.
Mr. Plouffe said the money likely to be saved from changing the law would flow to drivers’ bottom lines, and some of it would be used to help set up a benefits fund that the guild would administer and whose scope it would determine. Among the potential new benefits is paid time off for drivers.
Uber was not seeking to replicate the guild idea outside New York, which differs from other cities in that a much higher fraction of Uber drivers use the platform full time or close to full time, Mr. Plouffe added.
Also on Tuesday, Uber said the Freelancers Union, which supports independent workers, will advise the company on how to create portable benefits for its drivers and other gig economy workers.
Sara Horowitz, the group’s founder and executive director, praised the agreement as a bold step that would become “part of a larger strategy for this new work force.”
The agreement drew a mixed reaction from drivers. Eric Grant, a veteran Uber driver who recently served on a panel in Seattle that heard appeals from fellow drivers who had been deactivated — part of a special pilot program in that city — said Uber’s new appeals program was a much-needed change.
“One of the issues they have had in the past is that they deactivate people willy-nilly, without any appeals process,” Mr. Grant said.
Others, particularly those involved in competing attempts to organize Uber drivers in New York, were skeptical. Abdoul Diallo, who helped found an association of drivers in New York, which is called the Uber Drivers Network and claims about 5,000 members, said that the new organization sounded “bogus” and that the guild was no substitute for an actual union.
Mr. Diallo said deactivation was relatively far down the list of concerns for most drivers in his organization. “First and foremost, price cuts and commissions matter most to drivers,” he said.
The machinists union said no topic was off the table in the guild’s discussions with Uber, including fares and commissions.
Mr. Diallo’s group, meanwhile, is encouraging drivers to sign cards that will allow the Amalgamated Transit Union to represent them; more than 5,000 drivers have signed.