The wrong veto, for the wrong reasons

Jun 21, 2023

Uber and Lyft drivers chant outside Gov. Tim Walz's office on May 25, 2023, to call on him to sign legislation that would increase drivers' pay and provide them with more protections against deactivation. Walz wound up vetoing the bill. Photo by Max Nesterak/Minnesota Reformer.

During much the recent landmark legislative session, Gov. Tim Walz's presence seemed to be confined to photo opportunities depicting him rubber-stamping a raft of DFL bills that will transform the state — mostly for the good — in ways unimaginable months ago.

But as the solons concluded their business and headed home at the end of May, with Democrats lauding their achievements and Republicans lamenting them and pledging payback at the polls next year, Walz exercised his first and only veto of the term, indeed his first in more than four years in office.

The rejection of a single piece of legislation showed that the governor is not a total pushover for whatever his fellow party members can squeak through the legislative chambers with their thin majorities, a handful in the House and a bare one in the Senate.

But he vetoed the wrong bill — and for the wrong reason.

The measure Walz nixed would have mandated higher wages, annualized pay increases, and job security protections for Uber and Lyft drivers, a relatively powerless group with little economic clout and, not coincidentally, comprising a large share of racial and ethnic minorities.

The bill did, to be sure, have some significant shortcomings, like price increases likely to limit service to people with disabilities.

But for whatever Walz said in his veto letter, we suspect another unsaid rationale.

Uber and Lyft management shadowed the process, bemoaning that boosting driver compensation would eat into revenue.

Duh! Paying increased wages to workers naturally means higher expenses and lower profits, a feature that is usually overcome by passing on the increased expenses to customers through higher prices for goods and services.

The logic of ride-hail management would abrogate all minimum wage laws, overtime pay requirements, workplace safety protocols, and the like.

One of us is a former ride-hail driver who can attest to low pay, lack of benefits, non-existent job security, and the unfettered whims of management.

Drivers long to being treated like at-will employees — the lowest rung on the employment hierarchy.

The best way to maximize driver income is, like taxi's, to have long distance hauls that ideally take relatively little time getting back-and-forth from the pick-ups and destinations. But the reality of app-based driving is that most of the rides are short and do not yield much return, compounded by a great deal of waiting around or burning gas cruising.

But, wait, there's more!

Not only did ride-hailing executives castigate the Minnesota measure's impact on their bottom line, but they went a step further; Uber and Lyft officials declared that enactment of the worker-friendly measure would prompt them to curtail services throughout the state, except for the lucrative Twin Cities market.

The threat worked, at least by all appearances. Despite protestations from segments of his own party, which purports to prioritize rights of workers, Walz issued a veto, and now drivers have to wait until next year to get some decent pay.

The Uber/Lyft intimidation was hardly unique.

The ride-hail executives had a convenient model from a couple of weeks earlier involving the proposed establishing of nurse staffing standards and other health care protocols opposed by the Mayo Clinic.

The Rochester facility successfully fended off the proposition by threatening to divert a planned multi-billion dollar Rochester construction project to other states if the nurse staffing standards statute was enacted. Reacting to the threat, the DFL leadership initially carved out an exemption for Mayo.

This did not go over well with other health care providers, who moaned about the disparate treatment accorded them because they chiefly treat Minnesota commoners.

When all was said and done, the Legislature dropped the staffing standards altogether. Score one for our famous "nonprofit" health care clinic.

Lo and behold, Mayo announced Monday that it now plans to go ahead with its billion-dollar plus expansion plan in downtown Rochester after all. In the works for nearly a decade, it is comprises largely modifications to its campus and major parking changes, just the kind of alterations that would probably not have been taken out of state, anyway.

Nice bluff, Mayo: It worked.

The ride-hail execs took a page from the Mayo manual; it came from the chapter entitled "How to Succeed by Bullying Politicians." Score one for the ride-hail companies.

The DFL Legislature and Walz scored an incredible number of achievements during the 2023 session.

But when it comes to intimidation using economic clout to threaten to restrict its activities in the state, the score is: Big Business 2, Walz 0.

by Marshall H. Tanick, Minnesota Reformer June 7, 2023

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Marshall H. Tanick is a Twin Cities employment law attorney with the law firm of Meyer Njus Tanick.

Ross G. Tanick is a physician and former ride-hail driver.