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The Seattle City Council has voted to allow drivers for companies like Uber and Lyft to unionize. The move is intended to protect these for-hire workers and provide protections against unfair wages and working conditions. What makes the vote particularly significant is that this is the first time either on-demand car service company has faced the prospect of unionized drivers. And while Uber and Lyft are the most recognizable names, this ordinance also applies to all for-hire transportation network companies and taxis.

If a union is established among drivers for the transportation network companies, it will extend collective bargaining rights to hundreds of drivers, similar to those currently enjoyed by taxi drivers and employees of traditional for-hire transportation companies. Until today, Uber and Lyft drivers had been excluded from unionizing because they’re considered independent contractors, rather than employees.

When the legislation was introduced in September, council member Mike O’Brien explained that many of the drivers “make below minimum wage and have no rights in their jobs.” Now that the legislation has passed, all Seattle drivers who have for-hire vehicle licenses and have performed what the city calls a minimum threshold of trips will be eligible to participate in the union. Seattle will certify the unions and, after being verified, the newly formed Driver Representative Organization will be able to engage in collective bargaining with companies like Uber and Lyft.

The vote in favor of the legislation was unanimous, and will likely be used as a test case for this new type of workforce —  including other on-demand services such as TaskRabbit, Postmates, Luxe, Amazon Prime, and many others.

A Lyft spokesperson provided VentureBeat with a statement, saying:

“Lyft provides consumers with convenient and affordable transportation, and drivers with the ability to make money in their free time. Lyft drivers are entirely in control of where or when they work, and this flexibility is exactly why the service is so popular with people looking to make extra income. Unfortunately, the ordinance passed today threatens the privacy of drivers, imposes substantial costs on passengers and the City, and conflicts with longstanding federal law. We urge the Mayor and full Council to reconsider this legislation and listen to the voices of their constituents who choose to drive with Lyft because of the flexible economic opportunity it offers.”

A spokesperson for Uber also provided this statement:

“Uber is creating new opportunities for many people to earn a better living on their own time and their own terms. Drivers say that with flexible and independent work with Uber, 50% of them drive fewer than 10 hours a week, 70% have full-time or part-time work outside of Uber and 65% choose to vary the hours they drive 25% week-to-week.”

Neither company commented on how the union vote will affect their business in the Emerald City, but some have posited that it will result in increased fares. This vote could also affect the outcome of a class-action lawsuit brought against Uber by drivers who seek to be recognized as employees and have sought reimbursement for expenses incurred on the job. This isn’t the first time Uber has faced claims of unfair treatment for drivers — in 2013, drivers for its black towncar service staged a strike outside its San Francisco, California headquarters, with some seeking to form a union, though they ultimately did not succeed.

But as evidence that the issue isn’t clear-cut, North Carolina, Arkansas, Indiana, Ohio, and Florida have or will be enacting regulations to support Uber and Lyft’s position that drivers be designated independent contractors.

Update: Rebecca Smith, deputy director at the National Employment Law Project, said in a statement: 

“We applaud the Seattle City Council’s passage of a ground-breaking policy that is being watched closely across the country and is a positive step to help make sure the growing on-demand industry works for our economy and workers. Uber and Lyft drivers in Seattle can now exercise their voice, equalize their bargaining power with the multibillion dollar companies that broker their labor, and begin to rebuild the middle class for an inclusive economy. Cities nationwide should take note and follow Seattle’s lead as more and more Americans rely on this emerging economy to make a living.”

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