Union to represent 35,000 Uber drivers in New York City, but with limits

Uber and Lyft exit Austin
Uber and Lyft exit Austin

A union has gotten its foot in the door at Uber for the first time.

Uber announced Tuesday that it has recognized the newly formed Independent Drivers Guild, which will represent 35,000 drivers in New York City. The Guild is affiliated with the Machinists union, but its costs will be paid by Uber. Drivers can join for free.

Uber continues to insist the drivers are independent contractors and not employees.

As a result, the Guild will not be able to collective bargain on behalf of the drivers. The Machinists union has agreed that the Guild won't try to formally unionize drivers or seek to have them recognized as employees by the National Labor Relations Board, an Uber spokesperson confirmed.

The drivers also remain ineligible for benefits such as sick days or company paid health insurance.

However the company and the Guild say that it will help drivers to appeal if they are dropped by the online car service, and it will represent driver demands in regular meetings with Uber executives.

It will also provide low cost benefits, such as insurance and legal representation on traffic cases. Finally, it will lobby alongside Uber for changes to city tax rules that favor traditional taxis.

Related: Uber, Lyft pull out of Austin over fingerprinting requirement

Uber drivers are "doing their jobs and making a living without many of the supports and benefits that workers in other sectors enjoy," the Guild said in a statement.

David Plouffe, chief adviser at Uber, admitted the company needs to improve relations with its drivers.

"We haven't always done a great job working with drivers," he said in remarks announcing the recognition of the guild. "As our CEO, Travis Kalanick said two weeks ago, that's not good enough. It's time for a change."

Related: America's huge part-time workforce

There is legal pressure on Uber to change its position. Last month it agreed to pay $100 million to drivers to settle a federal class action on behalf of drivers in California and Massachusetts, who had argued that they were wrongly classified as independent contractors. The settlement did not change their status, though.

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