Minneapolis council passes minimum pay for Uber and Lyft drivers despite companies’ threats

Minneapolis City Council voted 7-5 on Thursday in favor of a package of regulations that would more than double pay for Uber and Lyft drivers and give them greater protections against unfair termination, or “deactivation.”

Mayor Jacob Frey’s necessary sign off on the ordinance is in doubt, however, after he sent a letter to the council on Wednesday urging them to take more time considering the policy. The council likely lacks the necessary nine votes to override a mayoral veto, setting drivers up for more disappointment after Gov. Tim Walz vetoed a similar proposal earlier this year.

Asked if he would veto the ordinance, a spokesperson for Frey said he will review the ordinance and its amendments. He has until Wednesday at 4:30 p.m. to veto the ordinance or let it become law.

Drivers celebrated the vote in City Hall and embraced the ordinance’s lead author Council Member Robin Wonsley.

“Today was a day that we have been fighting for a long, long time,” said Eid Ali, president of the Minnesota Uber/Lyft Drivers Association. “It’s a day that we will be celebrating for quite some time because it’s the day that workers won.”

Wonsley urged Frey to sign the ordinance despite his concerns.

“You’ve supported all of the amazing worker rights policies we’ve led at the city. Will you do the same in this moment and show that you are not a puppet for corporate exploitation?” said Wonsley, who has often been at odds with the second-term mayor since her 2021 election.

Lyft said it will pull out of Minneapolis if the ordinance takes effect, while Uber said it could do the same. Minneapolis council members seemed uniformly unconvinced that the companies would actually leave the city. They also uniformly said they believed drivers should be guaranteed a minimum wage, but they were divided on the details of the ordinance.

In his letter, Frey urged the council to wait until a task force on Uber and Lyft compensation convened by the governor comes back with policy recommendations, which are due on Jan. 1. That’s when the ordinance is scheduled to take effect should Frey sign it.

Frey also said the state has requested data from Uber and Lyft that should help them determine a fair rate of compensation.

Under the ordinance passed by City Council, drivers would earn at least $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.

Drivers say their earnings have declined over the years to less than 60 cents per mile and 14 cents per minute on average.

Both companies have warned the proposed minimum rate will lead demand to plummet and ultimately hurt drivers’ wages.

Lyft, in a letter to the council, said a $20 trip would double to $40 under the ordinance, while rides in low-income areas would be more expensive than a taxi cab in Manhattan. Lyft said drivers in Minneapolis last quarter earned an average of $37 per utilized hour — the time between accepting a ride and dropping off a passenger — including tips and bonuses.

The prospect of higher rates has drawn pushback from some disabled residents who fear a service they depend on could become unaffordable. Council President Andrea Jenkins authored an amendment, which was included in the final ordinance, that entitles drivers with wheelchair accessible vehicles to a higher minimum rate.

Drivers say that claim is ludicrous. Their wages are far less, they say, and they must pay for their own vehicles, gas, maintenance and insurance. Drivers also don’t believe that the companies will have to raise prices if wages increase. Rather, they believe the companies can simply take less of customers’ fares for themselves.

If passed, Minneapolis would join Washington state and New York City in setting minimum pay rates for Uber and Lyft drivers. The companies say fare prices have increased alongside drivers’ wages in both places.

The Minneapolis ordinance also takes aim at deactivation, which drivers say can happen with little recourse, leaving them saddled with debt for cars they can no longer use to earn money.

Under the ordinance, companies must give drivers five days’ notice of a proposed deactivation or sanction and the opportunity to present their response within seven days. That raised alarm from the mayor and the companies that they would be unable to immediately remove dangerous drivers from the platform.

The ordinance’s authors — Wonsley and Council Members Jamal Osman and Jason Chavez — authored an amendment that would allow the companies to temporarily suspend drivers for major infractions that endanger public safety.

For smaller infractions, drivers would have the right to have a hearing within seven days, and companies would have to determine it was more likely than not that the infraction occurred to keep drivers off their platforms.

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.

Council Member Andrew Johnson advised taking more time to work with the mayor to win his approval, arguing that failing to override a veto would deal a greater blow to the effort. If the council cannot override a mayoral veto, the council must go back to the drawing board and cannot bring something forward substantially similar. He moved to send the ordinance back to committee, but that was rejected by a majority of the council.

Council Member LaTrisha Vetaw supported sending the ordinance back for further review, arguing pushing forward with a proposal likely to fail just hurts drivers.

“There is no reason for us to re-traumatize folks when we can all count and we see the numbers here,” Vetaw said. “We have a great opportunity to work collectively … for the folks who have been showing up here for an entire year.”

Council members who voted in favor were Chavez, Aisha Chughtai, Jeremiah Ellison, Andrea Jenkins, Osman, Elliott Payne and Wonsley. Council members opposed were Emily Koski, Johnson, Linea Palmisano, Michael Rainville and Vetaw.