Minnesota lawmakers have reached a compromise with the Minneapolis City Council on a pay rate for rideshare drivers in the state to ensure that they are fairly compensated. But they reached the agreement without negotiating with Uber and Lyft, the two rideshare giants who have vowed to leave the state if the proposed rates take effect.
The state lawmakers and city councilmembers came to a tentative agreement on Monday that would set driver pay at $1.27 per mile and 49 cents per minute, lower than the Minneapolis council’s mandate of $1.40 per mile and 51 cents per minute, according to the Star Tribune.
The council passed its rate in March to ensure drivers earned the equivalent of the city’s $15.57 minimum wage, but Uber and Lyft said the pay hike would be unsustainable, would make rides too expensive, and would dissuade customers from using their apps.
While the new rate would be slightly lower, both companies say it’s still too high and take issue with not having a place at the negotiating table.
“[S]hould these statewide rates pass, we would be forced to shut down across all of Minnesota, not just Minneapolis,” a Lyft spokesperson said in a statement, according to the Star Tribune.
“Right now, the Legislature seems intent to negotiate with the Minneapolis City Council and not us,” an Uber spokesperson told the newspaper.
Despite Lyft and Uber’s opposition, leaders of a leftwing drivers’ advocacy group that pushed for the higher pay said they are willing to accept the compromise rate. Eid Ali, the executive director of the Minnesota Uber/Lyft Drivers Association, said the compromise rate is lower than what drivers’ advocates wanted, but he described the reported deal as a show of good faith.
Democrats say they believe that Uber and Lyft are bluffing about their intention to leave the state. Republicans, who slammed the compromise proposal, said they don’t believe that is true, according to the Star Tribune. “I think there’s a real risk that tens of thousands of Minnesotans are the collateral damage of this reckless policy,” GOP state senator Jordan Rasmusson told the paper.
Uber and Lyft threatened to leave Minneapolis by May 1, the date the city’s pay rate was previously set to take effect. But last month, the city council pushed back the implementation of the rideshare pay policy by two months, giving the Minnesota legislature until July 1 to implement a statewide policy that could override the city’s ordinance.
The two popular rideshare companies will remain operating in Minneapolis until at least July.
A day after the Minneapolis council passed its rideshare pay rate, a March study conducted by the Minnesota Department of Labor and Industry found that drivers would earn at least minimum wage with 89 cents per mile and 49 cents per minute, well below the rates proposed by the council and state.
Lyft previously told National Review that the company would support the study’s recommended rate, saying it would “increase current driver earnings by 17% while allowing us to continue to operate within the city.”