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; Minnesota sees fourth straight month of job growth; and ballot counting starts in pivotal United Auto Workers election 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 did not respond to a question about the city’s plans to enforce licensing for transportation network companies as new companies plan to enter the market.
Wridz is based on a subscription model, charging drivers about $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 uses 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 they 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 a 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 “UnionAvoidQRQ” 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 earlier 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 paid leave program.
The bill adjusting the program would also implement a seven-day waiting period for all medical claims, with payment distributed to employees retroactively.
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 finish voting on union
Ballots will be counted today in the high-stakes union election by more than 5,000 Mercedes-Benz workers at a plant in Alabama. The election could deliver the United Auto Workers its second major union victory in the South after as it seeks to maintain momentum from a historic strike against the Big Three American auto manufacturers that delivered significant wage gains. Workers at Volkswagen’s factory in Chattanooga, Tenn., voted to join UAW last month, a first for a Southern auto plant since the 1940s.
Meanwhile, 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.
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