Uber and Lyft are up to their old tricks in opposing increased wage rates for their drivers.
Mayor Jacob Frey inappropriately buckled to pressure in vetoing the proposal to boost their pay and provide other benefits that was approved a couple of weeks ago by the Minneapolis City Council. It was a disappointing and disturbing blow to working people shortly before the Labor Day weekend.
The two major ride-share companies successfully beseeched the mayor to veto the measure, which passed by a narrow 7-5 vote. While they advanced some reasonable objections to the proposed hike, including the inevitability of increased pricing and negative impact it may impose on poor people and the disabled, among other grounds, the main weapon in their arsenal of opposition was the threat to curtail or withdraw all together from providing services in the city unless the mayor would do to the ordinance what Gov. Tim Walz did to a similar statewide bill this spring — veto the measure, which probably lacks the sufficient nine supporting votes to override the mayor’s objection.
While the council’s wage hike raises some legitimate concerns, the mayor’s veto, like the earlier one by the governor are misguided in overlooking the disturbing tactics used by the ride-share companies in achieving those rejections, setting dangerous precedents for future legislative efforts locally and statewide to curb excessive corporate behavior.
Bullying and blackmail
The bullying, a form of blackmail deployed by the executives of ride-share behemoths, executives, is a time-honored tactic by big businesses to fend off potential incursions into their profit models by elevating the compensation or improving the working conditions of its personnel, whether employees or, like the drivers, independent contractors who earn low wages and have minimal or no fringe benefits.
As noted here 3 1/2 months ago, the Mayo Clinic used a similar threat to transfer a multimillion-dollar construction project planned for its home base in Rochester to some other state in opposing proposed state legislation increasing nursing staff-patient ratios.
The reason the strategy is used so often is because it works. Mayo got what it wanted from its threat: the dropping of the expanded staffing requirements.
Likewise, the-ride sharing companies effectively used that ploy to get Walz to timidly veto the statewide proposition, his only veto of the past session, before he sheepishly responded to criticism within his DFL Party, labor leaders and others by appointing an advisory committee to provide guidance on what he already said he would not approve.
The latest efforts by ride-share management to frighten Frey represent old whine in a new battle.
Tried and true tactics
While the tactics of the ride-share executives are the same in Minneapolis as on a statewide basis this spring, management added a new twist. In opposing the measure, Lyft shamelessly called for a “broader statewide solution,” less than three months after taking the lead in fighting against that approach.
The ride-share companies utilized the tried-and-true scare strategy, accompanied by the expectation that Minneapolis officials have short memories and weak guts. It’s a strong one-two punch, and it has worked so far as the mayor, who formerly supported as a City Council member a proposed $15 per hour “living wage” package for Minneapolitans, caved on this one.
[image_caption]Marshall H. Tanick[/image_caption]
Whoopee! So, one of the duo has agreed to pay nearly the same amount that the mayor formerly sought for all workers in the city.
As recent events demonstrate, the ride-share bullying is not the first time this type of tactic has been deployed and, given its track record of success, it probably won’t be the last.
The mayor’s veto still can be overridden by the council, but it looks like an uphill struggle to obtain the necessary nine votes of the 13 council members.
But as they deliberate over revival of the measure following Frey’s veto, they might want to start by asking the protesting ride-sharing executives how much they are paid, along with their benefits.
Marshall H. Tanick is a Twin Cities employment and labor law attorney.
Ultimately, this is what residents of Minneapolis voted for. Frey did a bad job his first term and they voted him back in, and not only that, gave him more power. Very little “bullying” was necessary. This was always the desired result for most Minneapolis residents, who don’t drive Ubers.
They gave him more power for a reason, many would argue that it was due to the city council being unable to often come to a consensus and were trying to micromanage departments without much success. Minneapolis residents had limited choices as well in mayoral candidates. It would be nice if the ride share companies did agree to all the demands, however they did not and the mayor had to also look at those who do take uber/lyft and can’t afford to lose the service or pay the increases.
Let me see if I understand this. Tanick states that the proposal “raises some legitimate concerns.” But he also states that in vetoing the proposal, the mayor “inappropriately buckled to pressure.” Why can’t it be that the mayor vetoed the proposal because of the legitimate concerns that he acknowledges exist? Its either legitimate or inappropriate – it can’t really be both.
Two things can be true at the same time – that large corporations are using bullying tactics and/or threats of leaving the market to obtain policy concessions. And that the policies the large corporations oppose are bad policies or at least raise legitimate concerns. Maybe the mayor and governor were driven by those concerns. And maybe they were bullied into vetoes, which itself isn’t necessarily bad if they believed that the rideshare companies would follow through on their threats.
The thing that Tanick overlooks here is that there is middle ground, and that at both the state and city levels the rideshare companies were not involved in the crafting of the legislation, which is why they had to resort to other tactics at the end. You can set the minimum rates anywhere, not just at the levels proposed at the state and city level. You can find a compromise figure (as the mayor separately agreed to with Uber) that raises the minimums without doing so to the point that it makes ridesharing unaffordable and drives the companies out.
The other “legitimate” concern with both proposals is the non-wage aspect, which makes it more difficult for rideshare companies to deactivate problem drivers, and would force them to consider re-hiring drivers that had already been deactivated. There have been thousands of sexual assaults by rideshare drivers, and making it harder to remove them – essentially requiring a criminal conviction – puts riders in danger. If a rideshare company deactivates a driver it deems dangerous, and the city/state forces the rideshare company to re-hire them, who is liable if that driver sexually assaults a passenger? In the employment context, if an employer terminates an employee, and the employee believes the the termination was discriminatory or otherwise wrongful, the employee can sue for damages. Here, the city/state is dictating who the rideshare companies have to hire/keep. That alone is a basis for vetoing both proposals. I would be very curious to see what Mr. Tanick, as an experienced attorney, would say about that.
https://www.cnn.com/2022/06/30/tech/uber-safety-report/index.html
Mr Tannick is wrong. What is happening here is political well organized entities want to legislate their preferred wage. And Mr Tannick believes these companies should well just pay. That is how the UAW wrote contracts with GM and Ford before they went belly up. In the old days the cab drivers used to sit in the airport cab parking lot all the time waiting for a ride. And today, they want to be paid the same manner without regard to demand and supply.
If Mr Tannick believes these companies are making money hand over fist , then why not fix the regulatory process to allow more competition ? Perhaps more independent cab drivers that could group together and offer similar services. Ah yes, the problem is the City and the Airport Authority has loaded up on regulation that only these players can navigate. And Mr Tannick wants more regulation.
Finally Mr Tannick, if the City demands that you pay your law firm employees and para legals some exorbitant wage. What would you do ?
“Finally Mr Tannick, if the City demands that you pay your law firm employees and para legals some exorbitant wage. What would you do ?”
I would love to see him answer that question. Or, as with the Mayo clinic, what if the City told them how they had to staff their office.
The rideshare drivers are independent contractors. The government has no more of a role in determining their wages than they can tell me what to pay the kid who shovels my sidewalk. As an attorney, Mr. Tanick knows better.
Hmmm… “independent contractors.” Code for indentured servitude with no rights or legal recourse.
I’ve been an independent contractor since 1983. I get to choose my employer, which is the very definition of freedom.
everyone in America chooses their employer whether they are an independent contractor or not
I say let them leave. We’ll find out what the fallout is.
Maybe people will have to go back to riding in heavily regulated cabs them.
And if Uber raises its pay, lets see how they compete with Lyft.