Minn. Gov. vetoes pay raise for drivers after Uber, Lyft threaten price hikes

Minn. Gov. vetoes pay raise for drivers after Uber, Lyft threaten price hikes
May 2023

Days after Minnesota Uber and Lyft drivers celebrated the passing of ridesharing legislation that would have increased their pay and protections, the state's governor, Tim Walz, vetoed the bill. Now Minnesota drivers are outraged, claiming that the governor bowed to "scare tactics." They vowed to keep fighting against alleged abuse to create better worker conditions in the state.

Walz's veto is his first in five sessions as Minnesota's governor and came hours after Uber threatened to pull out of nearly all Minnesota markets and only offer premium products in areas where services remained, The Star Tribune reported. Lyft had also threatened to create "transportation deserts" if the bill became law.

Uber & Lyft used their usual scare tactics from their playbook-- but we won't let billion-dollar corporations overrule the democratic process or the needs of our communities.
We know @TheMulda is on the right side & will win.

This is ?@Uber? scare campaign. Plz be aware that the ?@GovTimWalz? has your bill. We need protection against tnc abuse and labor law exploitation from ?@GovTimWalz?. Thanks to the #mnleg for listening voters who hired them to work fairly and honestly pic.twitter.com/nfxgpeS2DD

Authored by Minnesota Senator Omar Fateh, the ridesharing legislation would have kicked in July 1, 2024, and forced Uber and Lyft to pay drivers $1.45 per mile and 34 cents per minute in the state's busiest counties. Outside that area, drivers would have received minimum compensation of $1.25 per mile and 34 cents per minute. It also guaranteed a minimum fee of $5 for any transportation provided.

Uber and Lyft had argued that increasing driver pay would have caused rider prices to spike by 50 percent at minimum, the Star Tribune reported. In a press release, Walz said that he was protecting riders by vetoing the bill and signed an executive order "convening a working group of drivers, riders, rideshare companies, members of the disability community, and labor to issue recommendations for rideshare legislation" by January 1, 2024.

"Rideshare drivers deserve fair wages and safe working conditions," Walz said. "I am committed to finding solutions that balance the interests of all parties, including drivers and riders. This is not the right bill to achieve these goals. I have spent my career fighting for workers, and I will continue to work with drivers, riders, and rideshare companies to address the concerns that this bill sought to address."

The Minnesota Uber/Lyft Drivers Association (MULDA) tweeted that Walz wasn't protecting riders but instead was "in the pocket of corporate America." Fateh tweeted that Walz had "not one conversation" with drivers before vetoing the bill.

"While Uber and Lyft had access to the administration and elected officials, I want to make it clear that not once has the administration reached out to the drivers," Fateh tweeted. He promised that he "won't back down" and would make passing new ridesharing legislation a "top priority" during the state's next legislative session.

Uber sought "compromise"

An Uber spokesperson told Ars that it was always Uber's "goal to pass comprehensive legislation this session that would raise rates for drivers while providing them the flexibility and benefits they tell us they want," but said that a "compromise" in February was needed because Fateh's bill did not achieve that goal.

Lyft provided a statement saying that they "appreciate" Walz for "listening to many in the community, vetoing the bill, and instead creating a task force to properly study these important issues."

"Lawmakers should pass fair pay and other protections, but it must be done in a way that doesn't jeopardize the affordability and safety of those who rely on the service," Lyft's statement said. "We recently did this in Washington state, where drivers, labor leaders, elected officials and the companies came together to pass smart legislation that benefited all involved. We look forward to continuing our engagement and finding a similar pathway forward here in Minnesota."

According to Lyft, Walz was moved by letters sent by local groups who requested a "pause" on ridesharing legislation until more could be learned about the potential impact on people with disabilities who depend on affordable ridesharing for work and other activities.

Gig Workers Rising, a community of app workers pushing for better worker conditions, tweeted that the governor's decision to veto the law overlooked other at-risk communities and "is a huge loss for communities of color."

The ridesharing legislation also mandated more transparency from Lyft and Uber and "would have protected Uber and Lyft drivers, who are primarily immigrants, refugees, & people of color--who have a higher rate of deactivation, verbal abuse, and physical violence," Gig Workers Rising tweeted.

It's incredibly disappointing that @GovTimWalz decided to side with billion-dollar corporations & vetoed HB HF 2369/ SF 2319, which would have given Uber and Lyft drivers protections.
Shame on you governor!@TheMulda, we're in solidarity as you continue your fight.

Fateh, Walz, Gig Workers Rising, and MULDA did not immediately respond to Ars' request for comments.

Walz's working group has been directed to launch a study "to obtain and analyze data related to the working conditions of rideshare drivers in Minnesota and how potential changes may impact access and cost for riders," the governor's press release said. A written report is due January 1, 2024.

MULDA tweeted that Walz was acting as an "agent" for Uber and Lyft, seeking to spend taxpayer money to study minimum wage just because the ridesharing companies told him to, and warning that without laws, drivers will continue to be exploited and abused.