Uber and Lyft say they won't leave Minnesota after all — and drivers are getting a raise

ST. PAUL, Minn. — Taxi companies Uber and Lyft said Monday they will continue to operate in Minnesota now that state lawmakers passed a measure that will increase driver pay, but at a lower rate than approved by Minneapolis officials earlier this year.

While the new wage minimums are lower than the rate approved by the Minneapolis City Council in March, they are intended to ensure that drivers across the state are paid at least the city minimum wage of $15.57 per hour, although they will also receive higher could mean costs for passengers.

Minnesota lawmakers approved the pay plan Sunday evening, on the last day of the legislative session, sending the measure to Gov. Tim Walz, who has said he will sign the bill into law. The deal resolves months of uncertainty after the higher rate approved by the Minneapolis council prompted Uber and Lyft to say they would leave not just Minneapolis but the entire state.

“I am so, so, so overwhelmingly happy,” said Eid Ali, president of the Minnesota Uber/Lyft Drivers Association, a group of hundreds of drivers who have been advocating for higher wages at the city and state level since June 2022. a great victory for drivers.”

The new compromise requires taxi companies to pay drivers at least $1.28 per mile and $0.31 per minute starting December 1 while transporting passengers anywhere in the state.

That means a 10-mile, 15-minute trip would result in the driver getting paid at least $17.45, not including costs like gas or wear and tear on the vehicle. Drivers also spend time waiting for passengers to request a ride, but are not compensated for it.

While he supports the legislation, Ali says he is disappointed that the statewide measure will override Minneapolis' more generous measure. That plan required companies to pay drivers a minimum of $1.40 per mile and $0.51 per minute for the time they spent transporting a passenger within Minneapolis — that same 10-mile trip would have paid the driver $21.65.

Uber and Lyft said the rate was too high and threatened to leave the state if the Minneapolis council-backed rates were implemented.

Uber spokesman Josh Gold said Monday that the new rate approved by the Legislature “will allow us to continue to operate” in the city and across the state. Gold said the compromise was “hard-fought and brokered by the governor.” He said he expects prices for riders to rise, but did not say by how much.

Lyft spokesperson CJ Macklin said in a statement: “We found enough common ground to balance a new driver pay increase with what drivers can afford to pay and maintain service. We look forward to continuing to serve both riders and drivers across the state for the foreseeable future.”

A recent study commissioned by the Minnesota Department of Labor and Industry found that, after taking costs into account, 50% of Uber and Lyft drivers in the Twin Cities metro area spent $13.63 per hour while driving hours or less. In the rest of Minnesota, 50% of Uber and Lyft drivers made $8.12 per hour or less.

Supporters of the original measure in Minneapolis had said the city rate would ensure companies pay drivers the equivalent of the city minimum wage of $15.57 an hour. However, the study found that a lower rate of $0.89 per mile and $0.49 per minute would achieve the goal of $15.57 per hour.

Minneapolis Council Member Robin Wonsley, lead author of the city's measure, said in a statement: “I am deeply disappointed that our governor has acquiesced to Uber and Lyft's demand for right-of-way, stripping Minneapolis of our regulatory authority to to appease profit-driven interests. from Uber and Lyft.”

She added, “If drivers hadn't been organized at the local level and the Minneapolis City Council hadn't passed our strong ride-sharing policy in March, there wouldn't be a statewide policy to celebrate today.”

Gold, the Uber spokesman, said Minnesota is the first state to implement a statewide minimum wage for drivers. Washington state also has set a minimum wage, but requires a different rate in Seattle, Gold said.

Democratic Senator Omar Fateh of Minnesota, who championed the state's driver pay law, posted on social media: “We did it, passing the strongest protections for drivers in the country and a pay increase of 20% to be achieved. Proud of @TheMulda (the Minnesota Uber/Lyft Drivers Association) for their tireless efforts.”

Uber and Lyft previously pulled out of Austin, Texas, in 2016 after the city pushed for fingerprint-based background checks on drivers as a safety measure for passengers. The companies returned after the Texas Legislature overrode the local measure and passed a law implementing different rules statewide.

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This story has been corrected to show that the law would take effect in December, not January.

___

Trisha Ahmed is a staff member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow her on X, formerly Twitter: @TrishaAhmed15

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