Opinion | How Drivers Can Beat Uber at Its Own Game

If drivers incorporated their own joint venture, they could reduce their antitrust liability exposure risk while protecting their ability to coordinate in their negotiations with ride-share companies and their interactions with customers. Drivers could maintain the same compensation structure and flexibility as they do contracting directly with the platforms — working flexible hours and receiving per-ride salary commissions — while donating a portion, equivalent to the amount they might otherwise pay in union dues, to their newly formed Uber Drivers Inc.

Any refusal to deal with the company — by collectively switching off the app, for example — would be a decision of a “single firm” not to deal with a particular purchaser. Such “unilateral refusals to deal” are almost always held to be legal under antitrust laws. If Uber sued, the drivers could argue that Uber Drivers Inc. allows them to pool resources and reduce insurance, repair and accounting costs as well as provide vehicle financing and selection, cheaper health insurance and access to better retirement plans for drivers. All of these would reduce their costs and increase safety for ride-share passengers.

Further, drivers could develop more longstanding relationships with passengers, competing with Uber “off the app” to provide sales and discounts to customers of Uber Drivers Inc. And the joint venture would reduce their advertising costs.

Uber, Lyft and other virtual marketplace companies, like Handy and TaskRabbit, have emphasized, in lawsuits, public statements and even lobbying efforts coordinated through the app that they are not “employers” in part because their service providers are not barred from working for other apps or having their own businesses. So if Uber and Lyft now try to forbid drivers to siphon off their customers, they could risk exposure to labor and employment law liability.

Of course, there are risks to this strategy. Many drivers value the ease of earning money through ride-sharing apps, so why would they want to form a collective driving business? And Uber could refuse to deal with Uber Drivers Inc. by blacklisting drivers who join or recruiting replacement drivers. In other words, Uber Drivers Inc. could face many of the same retaliatory tactics (lockouts, replacement workers) that labor unions face in disputes with powerful employers.

But just as unions can prevail through broad recruitment, organizing and solidarity, an incorporated joint venture of Uber drivers could win if it attains a critical mass of membership — enough to wield countervailing power against Uber, even in just one city. If drivers are unable to win protections to form a union, incorporating may be the only way to gain leverage over Uber in negotiations over compensation and working conditions.

The history of labor organizing suggests that the benefits to workers of acting together — whether that is as a corporation, a limited liability company, a workers’ cooperative, or any other corporate form — can often outweigh the costs and difficulty. Incorporation can level the playing field, allowing drivers to secure not just higher wages but also health care benefits, insurance and someone to represent them when they feel the company has unfairly “deactivated” them.