The Minnesota Department of Labor and Industry will release a first-of-its-kind study on Friday based on all 19 million trips taken on Uber and Lyft in Minnesota in 2022. It’s the largest such analysis of fares on ride-hailing apps ever conducted, according to a Lyft spokesperson.
The Minneapolis City Council is aware of the report’s Friday release, according to Council Member Linea Palmisano.
Even so, the City Council appears likely to pass an ordinance on Thursday without knowing what’s in the state analysis. The analysis is expected to offer insight into what minimum rates would meet the city’s minimum wage ordinance, along with recommendations aimed at boosting driver pay without pushing prices so high that demand collapses.
The vote also comes as state lawmakers say they’ll introduce a bill setting minimum pay rates for Uber and Lyft drivers. Sen. Omar Fateh, DFL-Minneapolis, and Rep. Hodan Hassan, DFL-Minneapolis, plan to introduce a bill in the coming days, according to spokespeople. Hassan and Fateh authored a bill last year that was ultimately vetoed by Gov. Tim Walz, who instead created a task force to study the issue.
Mayor Jacob Frey, who vetoed a similar driver pay ordinance last year, said he’ll veto the ordinance again because it includes identical minimum pay rates of $1.40 per mile and 51 cents per minute for regular fares, and $1.81 per mile and 51 cents per minute for drivers with wheelchair accessible vehicles. With new members on the council since the November election, however, the council could have the votes to override his veto.
Frey has proposed $1.20 per mile and 34 cents per minute, which is slightly higher than a rate Uber and Lyft previously told drivers they’d agree to. Frey said that rate would more than double drivers’ earnings.
The ordinance’s lead author, Council Member Robin Wonsley said she knows “some state representatives” have spoken with council members about a study “coming at some point.”
“But there haven’t been any full briefings,” she said in a text message.
The ordinance’s other two co-authors — Council Members Jason Chavez and Jamal Osman — did not immediately return calls or text messages seeking comment.
Chavez tweeted a selfie on Thursday morning saying “It’s time to pass this Uber & Lyft Minimum Wage Ordinance.”
Palmisano said the report was originally scheduled to come out next week, but she was told it had been pushed up to Friday — “unfortunately not until after our council meeting.” A state government official also confirmed the report’s Friday release.
She said she was baffled that the council would make a decision on driver compensation without seeing the results of a report that is all but finished.
“I don’t think it should be going to a vote today,” Palmisano said.
Uber and Lyft have threatened to stop service if the City Council passes the ordinance, even though companies have continued operating in New York and Washington, which have enacted minimum pay standards.
What’s different about the Minnesota market is the larger share of low-income riders than in New York and Washington, according to the companies. Uber spokesman Josh Gold said after Seattle set minimum pay rates, drivers’ earnings per hour did not increase even though their pay per trip increased.
At a news conference on Wednesday, Frey urged the council to wait for the study’s release so that they can balance raising driver pay with keeping the service available in the city, especially the many low-income and disabled residents who rely on the service.
“It doesn’t do any good to get a pay raise if you no longer have a job,” Frey said.
The state analysis was supposed to come out by the end of the last year but took longer than expected given the sheer amount of data, according to the Department of Labor and Industry. That’s in part why the governor’s task force on Uber and Lyft compensation adjourned without making a recommendation on driver minimum pay rates.
