Uber as For-Profit Hiring Hall: A Price-Fixing Paradox and its Implications

Abstract

If the members of a hiring hall, run by a labor union or directly by workers, were independent contractor service providers, it would be engaging in impermissible price-fixing under the conventional interpretation of antitrust law. Yet Uber has thus far been permitted to engage in precisely this sort of price coordination between independent contractors -- for its own economic benefit, rather than workers'. Uber is operating a virtual, for-profit hiring hall, and it is doing so on terms that would not be allowed to workers themselves. It has thus far been permitted to do so simply because it is organized as a business firm. However, Uber’s model pushes against the limits of intra-firm immunity from price-fixing liability, which has long been an assumption of antitrust law, and it reveals how a firm’s relationship to workers interacts with the justifications for this assumption. The paper shows that in a contemporary service economy that increasingly relies upon work performed outside the bounds of the employment relationship, the firm exemption in fact leads to a regulatory inconsistency. This problem can be remedied, however, by permitting independent contractor service providers, such as Uber drivers, to engage in collective action with regard to their bargains with the firm that sets prices in the services they perform. This paper thus furnishes an argument in favor of collective bargaining rights for this group of workers that relies neither upon employee status, nor upon independent reasons in favor of collective bargaining, but rather upon a simple principle of consistency in applying existing price-fixing norms. In making this argument, I draw upon two recent, high-profile antitrust cases involving Uber, Uber drivers, and Uber consumers.

Keywords: labor, antitrust, price-fixing, labor exemption, collective action, collective bargaining, independent contractor, gig economy, employee, services