New ride-hail company promises drivers higher wages than Uber — and other labor news

Wridz founders Steve Wright and Donna Coine announce the launch of their ride-hail service in the Twin Cities beside Minneapolis City Council Member Robin Wonsley on May 16, 2024. Photo by Max Nesterak/Minnesota Reformer.

Take a seat in the Break Room, our weekly round-up of labor news in Minnesota and beyond. This week: Wridz goes live with Uber and Lyft deal up in the air; Minnesota has relatively low economic mobility; Mayo Clinic accidentally unveils union avoidance tactics; paid family and medical leave program costs increase; Minneapolis teachers union announces new leader; Minnesota sees fourth straight month of job growth; and workers vote down union at Mercedes plant in Alabama.

Wridz goes live

While Minnesota lawmakers negotiated behind-the-scenes on Thursday to find a compromise on ride-hail labor regulations that will keep Uber and Lyft operational in the state, members of the Minneapolis City Council celebrated the first ride-hail alternative launching in the city since Uber and Lyft threatened to leave over minimum driver pay rates the council passed.

Minneapolis City Council Member Robin Wonsley joined the husband and wife founders of Wridz — Steve Wright and Donna Coine — outside City Hall on Thursday to mark the company’s Minnesota launch, which could be followed by a slew of other ride-hail services.

“Unlike Uber or Lyft, we have heard from these rideshare alternatives that they have no problem with the policy that we have passed,” Wonsley said. “[The alternatives] like Wridz are already doing the things that we passed. They’re already paying minimum compensation.”

Asked if that were true, Wright said Wridz is not yet paying the city’s minimum rates of $1.40 per mile and 51 cents per minute, which the council is considering reducing before implementation on July 1. Wright said they need to offer competitive rates as they introduce themselves to the market but will comply with the wage floor when it goes into effect.

“Passengers will look at all three apps … and whichever saves them 50 cents or whatever, they’re going to take that,” Wright said. “In the beginning, we want to give the drivers a fair chance to get out there and introduce the company and introduce their services to people.”

Wright said they’ve received around 400 applications from drivers, who must go through a face-to-face interview as well as pass background checks and drug tests. Wridz, which launched in Texas in 2022, is currently operating in nine other states. Wright said he doesn’t know how many total drivers are active on the platform but they number in the thousands.

Wridz is only licensed to operate in Minneapolis, but I was able to book a ride across St. Paul on the platform.

Wright said in an email it was a technical error to allow rides in St. Paul and “the issue has been resolved.” A spokesperson for St. Paul said if city officials learn of companies operating without licenses, they will start by educating business owners of the city’s laws before issuing penalties.

Wridz is based on a subscription model, charging drivers $100 a month to use the platform but letting them keep 100% of the fare excluding fees for licensing and insurance. What also sets the company apart, Wright said, is they train drivers in customer service.

“Some of these companies, they don’t care about the drivers whatsoever. It could be a robot for all they care,” Wright said. “I don’t think they’ve been trained how to interact with their passenger and create that customer service relationship.”

Wridz driver Jason Loss, who also works for Uber and Lyft, said he’s optimistic about the subscription model.

“If everything were to work out and Wridz were actually to become successful here, I would end up making more,” Loss said. “But I wasn’t actually dissatisfied with the rates I was making on Uber.”

Loss said he’s been driving for Uber and Lyft for about six months to make extra money. He says the companies do run a “shady business” and can cut driver pay with little transparency or predictability. But he always ends up earning about $25 to $30 an hour before expenses — which is in line with the state study of driver pay.

Drivers are largely divided over minimum pay rates and regulations, with some worried higher prices could ultimately hurt their overall earnings, while others say the companies need to simply give drivers a larger share of each fare.

Minnesota’s low economic mobility

In Minnesota, the economic ladder is more like the sheer face of a cliff: Poor people are typically stuck at the bottom of the wage scale while high earners stay at the top.

From 2014 to 2019, the lowest paid workers making less than $13,000 a year had a 56% chance of staying at the bottom or having no income altogether, according to Star Tribune reporting on new data from the Federal Reserve Bank of Minneapolis. Those on the second highest rung — making around $57,290 — had an 82% chance of staying put or moving down.

Only Washington, D.C., and North Dakota have greater “income persistence” than Minnesota, which is tied with Maryland and Massachusetts.

“Certainly, beneficiaries of that have often been white earners, but it also does mean for Black earners and earners of color who start to earn in that highest quartile, they are less likely to fall out of it than other places,” Abigail Wozniak, vice president and director of the Minneapolis Fed’s Opportunity & Inclusive Growth Institute, told the Star Tribune.

Wozniak says the relative fixed income stratification reflects the state’s stable economy based around large corporations with lower rates of in-migration and new business formation. The lack of economic mobility is reflected in the state’s persistent racial disparities in income, homeownership and education.

Mayo Clinic reveals its union avoidance strategy

A senior labor relations specialist at Mayo Clinic accidentally sent a packet of the nonprofit health system’s union avoidance strategies to the wrong recipient, and the email ended up posted to Reddit, as Racket reported. The email cautions the recipient to not share its contents with “front line staff” and includes attachments called “UnionAvoidQRG” and “TEMPLATE 4 Talking points for Leaders.”

The Reformer reached out to Mayo Clinic to authenticate the email, and a spokesperson responded: “The content sent inadvertently to the wrong recipient reinforces what we say often and in public — we believe that a direct relationship between management and Mayo staff benefits employees, improves communication and helps us provide the best possible care to our patients.”

Mayo Clinic faces a burgeoning union campaign by nurses at its flagship Rochester campus. The Rochester Post Bulletin reported on a recent march by the new Med City Nursing Alliance, and the group’s survey that showed 54% of respondents support unionizing.

There are unionized nurses at Mayo system hospitals, but they were unionized prior to Mayo purchasing the facilities, and some have dissolved their unions in recent years, with Mayo’s tacit support.

By threatening to move billions in future investments out of state, Mayo Clinic effectively killed a bill last year supported by the state’s largest nurses union that would have given nurses across the state a greater say in staffing levels.

Paid family and medical leave cost increase

Minnesota workers and employers will need to contribute 25% more than originally planned to fund the state’s new paid family and medical leave program when it launches in 2026, under a bill passed by the Minnesota House earlier this week.

The Department of Employment and Economic Development, which will oversee the program, will seek a payroll tax of 0.88% — split between employers and workers — rather than the 0.7% originally planned when the Legislature passed the new program last year. House fiscal staff estimated the higher tax will bring in over $300 million more in revenue.

The state’s paid leave program guarantees Minnesota workers can take 12 weeks of paid family leave and 12 weeks of paid medical leave per year, capped at 20 weeks in a single year. In the first year, it’s estimated the state will distribute over $1.6 billion in benefits through the  program.

The bill adjusting the program would also implement a seven-day waiting period for all medical claims, with payment distributed to employees retroactively.

New leadership at Minneapolis teachers union

Members of the Minneapolis Federation of Teachers and Education Support Professionals elected Marcia Howard as the next teacher chapter president with 90% of the vote, the union announced on Friday. Howard replaces Greta Callahan, who is running for a seat on the Minneapolis school board.

Howard is an English teacher at Roosevelt High School and a former member of the U.S. Marines. She is also a police abolition activist and a key leader of the “autonomous zone” at 38th Street and Chicago Avenue, called George Floyd Square.

“While standing in the epicenter of a global social justice movement, our recognition that educational justice, equity, and safe and stable schools was a spark that I believe helped light the flame of this historic year for our union,” Howard said in a statement announcing her election.

Catina Taylor was reelected as president of the education support professional chapter of the union.

Fourth month of job growth

Minnesota employers added 3,900 jobs from March to April in the fourth straight month of job growth in the state, according to DEED. Job growth has been the norm over the past year, with job gains in 10 out of the past 12 months. The state’s unemployment rate of 2.7% remains well below the national rate of 3.9%.

Wages have also slightly outpaced inflation on average. Earnings increased 3.5% on average over the year ending in April compared to a 3.4% increase in the Consumer Price Index, according to DEED.

Mercedes workers vote down union

Workers at the Mercedes-Benz plant in Vance, Alabama voted 2,642 to 2,045 against unionizing with the United Auto Workers, dealing a significant blow to the union’s momentum as it seeks to organize foreign auto plants in the South.

Labor leaders hoped the election could deliver the UAW its second major union victory in the South after workers at Volkswagen’s factory in Chattanooga, Tenn., voted to join UAW last month. Following the Stand Up Strike against the Big Three American auto manufacturers last year, UAW President Shawn Fain said he wants to organize 150,000 workers.

Union leaders accused Mercedes of engaging in unlawful intimidation tactics, while Alabama state officials and business groups threw their weight behind the anti-union campaign.

UAW says the German government is investigating Mercedes-Benz for illegal anti-union actions at the Alabama plant after the union filed charges against the company for violating German law on supply chain practices.

*This story has been updated to reflect the results of the UAW election.

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