Jan 5, 2024 - News

Minnesota Uber, Lyft drivers promise new debate over minimum wage and job protections

The windshield of a vehicle with visible stickers of the Uber and Lyft logos. The reflected outline of a leafless tree is visible in the windshield.

Uber and Lyft stickers in a car windshield. Photo: Lindsey Nicholson/Getty Images

Uber, Lyft, and advocacy groups are gearing up for a rematch of an intense debate — both in the state Legislature and at Minneapolis City Hall — over new regulations on ridesharing companies.

Why it matters: How the debate plays out could shape the future of ridesharing in the Twin Cities.

Context: Rideshare drivers nationwide have been clamoring for new laws covering the widely used apps. Last year, both Uber and Lyft threatened to leave, first the whole state and later just Minneapolis, over proposals that would have raised pay and created new job protections for drivers.

  • Uber and Lyft fear those laws could threaten their businesses if they aren't accommodated.
  • Minnesota drivers say their current pay often barely covers their expenses, and complain that the companies can deactivate them for dubious reasons.

Catch up fast: Gov. Tim Walz vetoed legislation in May that would have set a minimum rate of driver pay statewide ($1.45 per mile, $0.34 per minute) and created a process for deactivating drivers.

  • Uber and Lyft said the proposed deactivation rules could have created safety concerns for passengers and that the pay provisions would have drastically increased fares.

The latest: In late December, after eight meetings, a task force convened by Walz adjourned without reaching consensus on the crucial issue of how much to raise driver pay.

  • State Sen. Omar Fateh (DFL-Minneapolis) — an author of last year's Uber/Lyft bill — said the task force "failed" and he would reintroduce his rideshare legislation this year.

Yes, but: Some compromises were reached. Uber and Lyft signed off on recommendations for clearer driver deactivation procedures and agreed in principle to provide drivers with more insurance coverage.

What they're saying: "I'm proud of the committee," task force co-chair Nicole Blissenbach, commissioner of the Minnesota Department of Labor and Industry, told Axios. "Do I wish we could have handed something over that was fully done and with everybody's agreement? Sure. But we would have needed more time."

  • Uber's representative, Josh Gold, is optimistic: "The bones are there" for an agreement, "if the legislature brings the drivers and the companies together."

Between the lines: Uber and Lyft insist that any deal on driver pay must settle the open question of whether rideshare drivers are independent contractors under Minnesota law — an issue that's been a feature of similar disputes in other states.

  • Independent contractors enjoy fewer labor protections than employees who have the right to unionize and are covered by workers' comp laws.
  • Uber believes most drivers appreciate the flexibility of non-employee status. Lawmakers say codifying drivers' independent contractor status "is a non-starter in the legislature."

The intrigue: In Washington state, the rideshare companies cut a deal in which they agreed to minimum wage rules for drivers in exchange for provisions that — the companies say — cement rideshare drivers' status as independent contractors, said Gold.

  • "It's disingenuous to say the issue was resolved in other places," said Blissenbach, a former labor attorney. She said Washington state "creatively sidestepped" the issue — and that resolving the issue in Minnesota would've been too complex for the task force.

Meanwhile, in Minneapolis, city council members are continuing to explore their own regulations within the city limits.

  • In August, Mayor Jacob Frey vetoed an ordinance that — much like the Legislature's proposal — would have established a minimum wage for rideshare drivers and created new deactivation protections. The mayor wasn't a fan of the regulatory portions of the ordinance.

But, but, but: Frey said he'd support standalone legislation aimed only at raising driver pay — so, for now, the council and mayor have been focusing on that issue. The two camps are currently trying to reconcile differing ideas about how to handle a wage increase.

  • City council member Jason Chavez, who co-authored the ordinance last year, said he was "disappointed" the governor's task force punted on the minimum wage issue. "We thought that [the task force] was going to help guide us." But he doesn't want to wait for the state to act.

What's next: The Minneapolis council expects to receive an analysis of its different wage options on Jan. 19, Chavez added.

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