Minnesota Legislature approves minimum pay for Uber and Lyft drivers in final hours of session

Legislators approved a last-minute deal to set minimum pay standards for Uber and Lyft drivers that will prevent the companies from leaving parts of the state on July 1.

The House and Senate passed the deal Sunday before a midnight deadline, sending it to Gov. Tim Walz's desk.

Uber spokesman Josh Gold said in an email, "While the coming price increases may hurt riders and drivers alike, we will be able to continue to operate across the state under the compromise brokered by the governor."

The agreement supersedes a recent ordinance from the Minneapolis City Council on pay standards and sets minimum rates statewide at $1.28 per mile and 31 cents per minute. If the bill becomes law, the new rates would take effect Dec. 1.

Although the pay rates in the bill were lower than the drivers wanted, they were happy to see a deal come together, said Marianna Brown, vice president of the Minnesota Uber/Lyft Drivers Association.

The bill's lead sponsor in the House, Rep. Hodan Hassan, DFL-Minneapolis, thanked the drivers' groups. "Your tenacity is why we're here today," Hassan said just before the bill, which includes pay minimums and other regulations, passed the House 71-59.

Late Saturday, Walz joined legislators at a hastily called news conference, signaling his support — unlike last year when he vetoed a similar bill. "No one else has been able to do this in the country," Walz said. "Minnesotans will be able to continue to use these services if they see fit."

Sen. Omar Fateh, DFL-Minneapolis, became emotional and was barely able to speak at the announcement, saying it had been "two long years" of work.

The deal came after Fateh had been missing from the Senate floor for the morning votes. The Senate then shut down and went into recess for 11 hours during the negotiations. The DFL controls the Senate 34-33 so Fateh's absence meant all other work came to a standstill.

At the Saturday evening news conference, Fateh said he spent the day in negotiations with staff and DFL leaders to get the bill in the shape to pass. Asked by reporters if he issued an ultimatum to DFL leadership over the bill, he deflected and didn't respond directly.

"Sometimes legislation like this takes a long time to negotiate," Fateh said. "We spent the day, we got it right."

The ordinance approved by the Minneapolis City Council earlier this year would have required a rate of $1.41 a mile and 51 cents a minute, or at least $5 minimum per ride. Those rates prompted Uber and Lyft to say they planned to leave the city as soon as the ordinance took effect.

Council members delayed implementation of their new rates from May 1 to July 1, giving legislators in St. Paul more time to negotiate.

A study ordered last year by the state Department of Labor and Industry estimated that, for drivers in the Twin Cities metro area, it would take 89 cents per mile and 49 cents per minute to approximate the minimum wage, or $1.21 per mile to provide drivers with more benefits.

The range was higher for drivers in greater Minnesota, with the study's suggested per-mile rate ranging from $1.16 to $1.40 because drivers tend to travel farther between fares.

Earlier this month, Uber proposed a rate of 68 cents per mile as a "negotiating tactic to get us at the lower end of the study," Gold said. "The low end of the study, while quite expensive, was workable."

The deal means that for a 10-mile, 15-minute ride, a driver would make $17.45. The rates proposed by DFL leaders earlier this month would have netted drivers $20.05 for the same trip, and the original Minneapolis ordinance would have given drivers $21.75.

Some Minneapolis council members weren't happy with aspects of the deal, including council Vice President Aisha Chughtai, who posted to X Saturday that "preemption is bad. Period."

"Any and all attempts to undermine local control are bad," she continued. "It's a Republican and corporate tactic used around the country. Watching our @GovTimWalz cave to multibillion dollar corporations in insisting on preempting Minneapolis is gross."

Council Member Robin Wonsley said in a statement she was deeply disappointed with the bill that preempts Minneapolis' ordinance.

Gold, the Uber spokesman, said riders and drivers sent almost 100,000 emails to legislators about the issue.

Minneapolis Mayor Jacob Frey said in a statement that "the state's per-trip rate ultimately pays drivers a wage that is consistent with the figure I proposed several months ago, and I am grateful to state officials for arriving at a workable figure that will accomplish both goals."

Responding to the announcement, Republican leaders said they were not part of the negotiations. Senate Minority Leader Mark Johnson, R-East Grand Forks, said they had to attend the news conference to learn the details of the deal.

"We've been waiting around for 10 and a half hours in the Senate," Johnson said late Saturday. "Senator Fateh and others were really holding up the work of the state and keeping Republicans in the dark on what's going on."

Staff writer Rochelle Olson contributed to this report.