Politics and Government

Uber, Lyft will stay in Minneapolis and the state after reaching compromise on driver pay

A House committee sits at a large table
The Labor and Industry Finance and Policy Committee hears testimony regarding HF4746 during a meeting in St. Paul on May 7.
Ben Hovland | MPR News

Uber and Lyft say they will stay in Minnesota following an agreement reached with state legislators on a new bill setting minimum wage standards for rideshare drivers. 

The state bill sets a minimum wage for drivers of $1.28 a mile and $.31 per minute. It overrides a Minneapolis city ordinance that set a higher minimum wage.

Gov. Tim Walz, who vetoed rideshare legislation last year, says he’ll sign this bill.

Uber and Lyft had previously threatened to withdraw from Minneapolis and from the state if higher wages were mandated.

In a statement, a Lyft spokesperson said, “Through direct engagement with all stakeholders, we have found enough common ground to balance a new pay increase for drivers with what riders can afford to pay and preserve the service. We look forward to continuing to serve both riders and drivers across the state for the foreseeable future.”

An Uber spokesperson also shared a statement with MPR News which read in part, “While the coming price increases may hurt riders and drivers alike, we will be able to continue to operate across the State under the compromise brokered by the Governor.” 

The state bill supersedes a Minneapolis city ordinance passed earlier this year.

A phone sits on a dashboard car mount
Rideshare driver Farhan Badel pulls up a job on the Lyft driver app, displaying a $7 fee for a ride from downtown Minneapolis to Minneapolis-St. Paul International Airport, during his shift on March 28.
Ben Hovland | MPR News

City Council President Elliot Payne called the agreement a “major win for drivers.”

“First they started at the state capitol and they were denied protections, and then they came to City Hall. This has been more than a year in the making. And, of course, there's a lot of twists and turns, we didn't all get exactly what we wanted.” Payne said. “But through the process of negotiation, and really just showing up for each other, we were able to pass some of the strongest legislation in the country.”

However, at least one other council member had mixed reactions. Council member Robin Wonsley said while the legislation is “one of the strongest rideshare bills in the country,” she said state officials gave into Uber and Lyft’s demands. 

“I am deeply disappointed that our Governor acquiesced to Uber and Lyft’s demand of preemption, stripping Minneapolis of our regulatory authority in order to appease the profit-driven interests of Uber and Lyft,” Wonsley said. “This action has set a dangerous precedent and will be weaponized to dissuade other cities, unions and organizations from championing necessary labor protections in the near future.” 

Minneapolis Mayor Jacob Frey shared the following statement regarding the agreement:

“I have had two overarching goals in this conversation: getting drivers a rate increase and keeping rideshare operating in our city. The state’s per trip rate ultimately pays drivers a wage that is consistent with the figure I proposed several months ago, and I am grateful to state officials for arriving at a workable figure that will accomplish both goals.” 

Frey previously proposed a figure of $1.20 a mile and $.35 a minute. 

A man reads from his notes as he speaks into a mic
MULDA president Eid Ali testifies in support of HF4746 during a Labor and Industry Finance and Policy Committee meeting in St. Paul.
Ben Hovland | MPR News

During the process of negotiations, several rideshare companies have planned to enter the market, including Wridz. CEO Steve Wright says he believes his company will still be able to pay drivers more than the minimum wage created by the state. 

“Since Wridz doesn’t keep anything from the trip, we have a little more leeway to give drivers more,” Wright said. 

Wridz works under a subscription model where drivers pay a fee of about $100 a month to use the app and the drivers keep 100 percent of the money earned on trips. 

Eid Ali, president of the Minnesota Uber/Lyft Drivers Association (MULDA), said while the agreement between the state and the two rideshare companies is a victory, he believes drivers still won’t be compensated based on their expectations.

“These drivers deserve to be compensated fairly and I don’t see that quite yet. So we’re going to take what we get now, but it’s not going to be the end of it. We’ll just come back and fight for another day,” Ali said.

The new rates will go into effect on Dec. 1. More information on the bill can be found under “article 17.” 

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