Ride-share companies resort to bullying and threats — and they’re working

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.

Marshall H. Tanick

He did the bidding of the ride-share executives and vetoed the measure although he announced that one of the two companies, Uber, agreed to raise its pay to at least the minimum wage required by law, between $14.50 and $15.19 per hour. As for Lyft, the other major ride-share entity, radio silence.

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.