Uber, Lyft say they’d leave Minnesota under ‘compromise’ rideshare wage bill

Democratic-Farmer-Labor legislators and Minneapolis City Council leadership have reached what they called a compromise on minimum wage for rideshare service drivers, but Uber and Lyft say they don’t support it.

The rideshare companies on Monday said they’ll pull out of Minnesota under a bill that would set the statewide minimum wage for ride-hailing drivers at $1.27 per mile and $0.49 per minute.

“This compromise represents significant movement from the Minneapolis City Council as we all work towards ensuring drivers in our state are fairly paid,” said House Majority Leader Jamie Long, DFL-Minneapolis.

The Minneapolis City Council earlier this year passed an ordinance setting the minimum wage at $1.40 per mile and $0.51 per minute in city limits, prompting ride-hailing companies’ threats to leave the city and possibly the entire state of Minnesota on July 1 when the ordinance goes into effect.

Minneapolis city leaders already pushed back the start date from May 1, buying more time for negotiations.

A state study published in March found metro Uber and Lyft drivers make about $14.48 per hour on average after expenses like gas, insurance and wear-and-tear. That’s below the current Minneapolis minimum wage of $15.57.

The per-mile compensation rate would have to be $0.89 per mile and $0.49 per minute in order to reach Minneapolis minimum wage, according to the study from the Minnesota Department of Labor and Industry. When accounting for sick time, health insurance and retirement, the mileage rate would have to be $1.20.

Response from rideshare companies

In response to the Minneapolis ordinance, Uber has said it would leave the Twin Cities, and Lyft said it would leave Minneapolis. With a statewide wage bill, they’re saying they’ll leave the whole state.

“It’s disappointing some in the Legislature are allowing the Minneapolis City Council to drive a decision that impacts millions of people who don’t live in the city,” said Josh Gold, a spokesman for Uber. “We’ve made a serious offer and hope we can still work with the governor and Legislature on a statewide solution that allows rideshare to remain in the state.”

DFL lawmakers have dismissed rideshare companies’ threats to leave as a bluff.

Protections and minimum wages for ride-hailing drivers passed in the Legislature last year, but DFL Gov. Tim Walz vetoed the bill in May amid threats by Uber and Lyft to withdraw from Minnesota. It’s the only time he has rejected a bill in his more than five years in office.

A spokesperson for the governor’s office called the new bill language a positive step, but it remains unclear whether Walz would sign the bill in its current form.

“The Governor’s goal remains to be finding a solution that ensures workers are paid fairly while allowing these essential services to remain in Minnesota,” his office said in a statement. “He will continue discussing this issue with legislative leaders over the coming days.”

‘Major development’

Backers of the new wage proposal said it was a “major development” in the negotiations that brings minimum compensation for drivers to compensation that aligns with other major metropolitan areas in the U.S.

“This agreement is the result of hard work from the authors and stakeholders to ensure every Minnesota community has access to safe, reliable transportation,” said Senate Majority Leader Erin Murphy, DFL-St. Paul.

One GOP lawmaker, Sen. Jim Abeler, R-Anoka, joined DFLers and Minneapolis City Council members in backing the proposed changes announced Monday. Other Republicans pointed out that what DFLers are billing as a compromise is ultimately an agreement between people on one side.

“Democrat legislators struck a deal with Democrat City Council members that will still drive Uber and Lyft out of Minnesota,” Rep. Pat Garofalo, R-Farmington, said in a statement. “If this bill becomes law, Democrats will be fully responsible for the severe consequences for the disability community, tourism industry, and thousands of Minnesotans who rely on ridesharing services each day.”

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