May 6, 2024 - News

Uber, Lyft still threaten to leave as Minneapolis, state lawmakers announce rideshare deal

A car with an Uber and Lyft sticker in its windshield

Photo: Allison Zaucha/Bloomberg via Getty Images

Minneapolis council members and top DFL legislators have announced a "compromise" to create a statewide pay floor for rideshare drivers. But rideshare companies aren't on board.

Why it matters: A spokesperson for Lyft β€” which had previously only threatened to leave Minneapolis β€” said the company would be forced to end operations "throughout the state" if the deal became law.

Yes, but: House Majority Leader Jamie Long told reporters he thinks the companies are "bluffing."

  • If he's right, officials may have secured huge raises for more than 8,000 Twin Cities drivers β€” most of them working-class immigrants.

Catch up fast: For a year-and-a-half, Minneapolis City Council and the state Legislature have been debating new rideshare pay standards under intense pressure from the companies. Gov. Tim Walz vetoed a past state proposal last year.

  • Minneapolis passed its own pay ordinance in March, but agreed to continue working with the Legislature on a statewide minimum.
  • Uber and Lyft were not involved in the talks, Long told reporters on Monday.

By the numbers: Per Monday's deal, Minneapolis leaders agreed to lower their ordinance's pay rate to $1.27 per mile and 49 cents per minute.

  • The city's rule, set to take effect July 1, had set a $1.40 per mile and 51 cents per minute minimum.

The big picture: Minneapolis Mayor Jacob Frey and business leaders have hoped the Legislature would salvage a compromise and keep the rideshare companies in the market. Uber and Lyft's reactions to this news dampen those hopes.

The intrigue: The governor has previously urged lawmakers to use a state-backed economic analysis as the basis for their driver pay rate. However, lawmakers' new rate is just outside the study's range for metro-area drivers.

  • The study had proposed between 89 cents and $1.21 per mile for metro drivers.
  • In a statement to Axios, a Walz spokesperson did not confirm whether the governor would sign Monday's deal into law but called it "a positive step in the right direction."

What they're saying: Uber spokesperson Josh Gold called the deal "disappointing," saying the company hopes "we can still work with the Governor and Legislature on a statewide solution that allows rideshare to remain in the state."

The other side: Minneapolis City Council President Elliott Payne told Axios that rideshare platforms should not "have the flexibility to pay drivers sub-minimum wages."

Between the lines: Monday's deal averts what would have been the awkward scenario of state DFLers passing legislation to override a DFL-majority city.

What's next: A Minnesota House committee will hear the proposal on Tuesday morning.

  • The council will begin its amendment process next week.
  • There are a few more weeks for dealmaking: The Legislature must adjourn on May 20.

Go deeper: What Minneapolis can learn from Uber and Lyft's year-long exit in Austin, Texas

Axios' Torey Van Oot contributed reporting.

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