Seattle passed an ordinance allowing unions to organize independent contractors serving as drivers for ride-sharing services like Uber and Lyft.  This decision holds that the ordinance is pre-empted by the Sherman Antitrust Act since it contemplates horizontal price-fixing by non-employee drivers.  The ordinance is not saved by the state action exemption because only the state, not a city, may regulate its economy as sovereign in a manner that contradicts federal antitrust laws.  Here, Washington had not clearly articulated and affirmatively expressed a state policy allowing price fixing of fees by for-hire drivers.  Washington passed a law purporting to allow localities to regulate for-hire transportation without liability under the federal antitrust laws, but that did not authorize regulation of the driver’s charges to Uber and Lyft.  The ordinance also failed the active supervision requirement that was applicable in this case because the municipality itself was not fixing prices but rather enabling the private party drivers to do so.  The state did not supervise the enforcement of the ordinance at all.

Ninth Circuit Court of Appeals (Smith, M., J.); May 11, 2018; 2018 U.S. App. LEXIS 12337