Mongo connection url fails in Github Actions CI even though credentials are correct

In my CI I need to make sure that my code works with mongo and so I'm using the official mongo docker image and passing my desired credentials as environment variables for the mongo image.

build-on-mongo:
    runs-on: ${{ matrix.os }}
    env:
      MONGO_INITDB_ROOT_USERNAME: root
      MONGO_INITDB_ROOT_PASSWORD: password
      MONGO_INITDB_DATABASE: vote-stuysu-org
    services:
      mongo:
        image: mongo
        ports:
          # Maps tcp port 27017 on service container to the host
          - 27017:27017
    strategy:
      matrix:
        os: [ubuntu-20.04]
    steps:
      - uses: actions/checkout@v2
      - uses: actions/setup-node@v1
        with:
          node-version: '14.x'
      - name: Install dependencies
        run: npm install

      - name: Test
        run: npm test
        env:
          MONGO_URL: mongodb://root:password@localhost:27017/vote-stuysu-org

However, in the test step, an error gets logged saying:

(node:2158) UnhandledPromiseRejectionWarning: MongoError: Authentication failed.

I'm using mongoose alongside nodejs and so this is the code responsible for authentication:

mongoose.connect(process.env.MONGO_URL, {
    useUnifiedTopology: true,
    useNewUrlParser: true
});

I don't think that my connection uri is wrong but I'm not sure why the authentication is failing.