The law approved unanimously by the Seattle City Council recognizes the right of drivers for on-demand ride companies known as Transportation Network Companies, as well as taxi and for-hire drivers, to collectively negotiate on pay and working conditions.

Uber and Lyft both opposed the measure and argue that federal law precludes such local legislation. The law marks a new approach to addressing the heated debate over whether Uber and Lyft drivers ought to have some or all the legal rights of employees, which would substantially increase companies' costs.

Despite facing regulatory battles in Seattle, both companies have growth in popularity there, with thousands of drivers using the app.

Uber said about half its drivers work fewer than 10 hours a week, and there is such a high turnover of drivers that designating them as employees or allowing them to unionize doesn't make sense.

The Seattle law does not rule on whether drivers are employees or contractors but extends to drivers rights usually reserved for employees.

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