Minneapolis council weighs minimum pay ordinance for Uber and Lyft drivers

A city committee advanced the ordinance as the governor’s task force on Uber and Lyft met for the first time

By: - July 25, 2023 5:24 pm

Minneapolis Council Member Robin Wonsley speaks at a rally of Uber and Lyft drivers in City Hall on Jan. 12, 2023, to announce she plans to develop new labor protections for drivers. Photo by Max Nesterak/Minnesota Reformer.

Three Minneapolis city council members introduced a proposal on Tuesday to raise wages for Uber and Lyft drivers and set new rules on terminating — or “deactivating” — drivers from the apps.

The proposal revives an effort to regulate Uber and Lyft two months after Gov. Tim Walz vetoed similar legislation at the state level. The governor instead created a committee made up of drivers, Uber and Lyft representatives, and other stakeholders to recommend legislation next year.

At the same time the governor’s committee met for the first time on Tuesday, a Minneapolis City Council committee advanced the proposed ordinance and scheduled a public hearing for Aug. 8.

The parallel efforts could lead to two different sets of regulations for Uber and Lyft in Minnesota or the state could end up preempting the city’s ordinance shortly after its proposed start date of Jan. 1.

Council Member Robin Wonsley, who authored the ordinance with Council Members Jason Chavez and Jamal Osman, said she doesn’t see the city’s effort conflicting with the state’s.

“It’s a task force that’s moving at the state level. They’re not legislators. They’re not passing policy,” Wonsley said. “We would love to see these protections be granted statewide. But as of now, we’re taking initiative to make sure these protections are happening in Minneapolis.”

A spokesperson for Lyft said the city should wait for the governor’s task force to complete its work rather than “ramming through bad policy.”

“This proposal doubles down on the flawed bill vetoed by Gov. Walz earlier this year, which would have made rideshare in Minneapolis more expensive than in New York City. Drivers would have earned less, since only the most wealthy could have afforded a ride,” the Lyft spokesperson wrote.

Uber and Lyft classify their workers as independent contractors rather than employees, which exempts the companies from having to pay a minimum wage, overtime, Social Security, unemployment insurance and workers’ compensation. While drivers say they enjoy having control over their work schedules, they want some of the basic protections granted to employees.

The Minneapolis proposal would guarantee drivers a minimum of $1.40 per mile and 51 cents per minute — which would increase with inflation — and at least $5 per ride. Tips would not count toward the minimum compensation, and drivers would be entitled to 80% of any rider cancellation fee.

The minimum rates for Uber and Lyft are slightly different than those approved by the state Legislature — $1.45 per mile and 34 cents per minute plus a $5 minimum fee. The Minneapolis rates would be similar to those in New York City and higher than Washington state.

Minneapolis caps taxi fares as $4.70 for the first mile and $2.75 for each additional mile plus 40 cents for each minute the taxi is not moving up to $24, according to a city spokeswoman.

The city ordinance would also limit transportation network companies’ ability to deactivate drivers without cause. Some drivers say they’ve been unfairly kicked off the app without explanation, leaving them saddled with debt for cars they can no longer use to earn money.

The city of Minneapolis requires drivers have vehicles less than 11 years old and with fewer than 150,000 miles. Nationally, Uber allows drivers to use vehicles up to 16 years old.

The Minneapolis ordinance requires companies to have clear written rules stating the circumstances under which a driver may be deactivated or sanctioned. Companies must also give drivers five days’ notice of a proposed deactivation or sanction and the opportunity to present their position within seven days.

The ordinance would require the companies to reconsider the deactivations of drivers going back to 2021, a proposal the companies have balked at. Uber and Lyft say they would have to retroactively review deactivations for which they may not have records and in some cases find victims to testify against drivers.

The proposed ordinance says Uber and Lyft would have to permanently deactivate drivers if they are convicted, or receive a stay of adjudication, of a number of serious crimes, including stalking, carjacking and sexual assault.

The city ordinance does not touch insurance, which was a key sticking point in negotiations over the state legislation earlier this year. Currently, drivers are required to pay for their own auto insurance while Uber and Lyft carry additional liability insurance and personal injury protection.

*Due to incorrect information provided by the city of Minneapolis, a previous version of this story misstated that the city has a minimum fare rate for taxis. The city sets a maximum fare rate for taxis.

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Max Nesterak
Max Nesterak

Max Nesterak is the deputy editor of the Reformer and reports on labor and housing. Previously, he was an associate producer for Minnesota Public Radio after a stint at NPR. He also co-founded the Behavioral Scientist and was a Fulbright Scholar to Berlin, Germany.