Dismissing Uber and Lyft’s threats to leave the city, the Minneapolis City Council voted 10-3 to override a mayoral veto of minimum pay rates for drivers.
The vote on Thursday sets up a six-week standoff between the progressive City Council and two tech giants, with Uber saying it will end service in the entire Twin Cities metro area when the rates take effect on May 1. Lyft says it will end service in Minneapolis when it takes effect.
Driver activists in the council chambers cheered after the vote was called in celebration of a significant victory after three disappointing vetoes in the past year — one by Gov. Tim Walz and two by Mayor Jacob Frey.
“It has been a rough journey… Thank God to the City Council members and all the elected officials who listened to me,” said Eid Ali, president of the Minnesota Uber/Lyft Drivers Association, at a news conference after the vote.
The veto override sends the pitched political conflict back to the state Capitol, where legislators began hearings on a bill this week that would set statewide rates, after Walz vetoed a bill last year.
Both Frey and Walz said they support raising wages for drivers but have been more sensitive to the companies’ warnings that pushing rates too high could backfire and cause demand to sink and the companies to pull up stakes.
Uber released a statement after the vote saying it was “disappointed the council chose to ignore the data and kick Uber out of the Twin Cities, putting 10,000 people out of work and leaving many stranded.”
The ordinance’s supporters on the City Council say the rates they passed — $1.40 per mile and 51 cents per minute — are what’s required to ensure Uber and Lyft drivers are guaranteed the city’s minimum wage of $15.57 an hour after accounting for their expenses.
But those rates are actually higher than what’s required to guarantee drivers the same minimum wage promised to all other workers, according to a massive state analysis of the more than 18 million trips taken in Minnesota in 2022.
That study, the largest of its kind ever conducted, found that drivers would need to be paid 89 cents per mile and 49 cents per minute in order to earn the city’s minimum wage after paying for vehicle expenses and payroll taxes. The study’s authors estimated a higher rate of $1.20 per mile and 49 cents per minute that would allow drivers to be able to earn the minimum wage after paying for comprehensive benefits including health insurance, paid sick leave, paid family and medical leave, retirement savings and unemployment insurance.
The City Council, which chose to pass the ordinance a day before the state study’s release, pointed to the report to bolster their case because it shows drivers earned less than the city minimum wage after accounting for expenses. But they shrugged off the report’s estimates for minimum pay rates.
Those council members pointed to a city report instead. That report used data from Seattle as a model. The city report warns the council of its limitations since it’s not based on “direct unrestricted access to rideshare data” in Minneapolis.
In an interview after the vote, Council President Elliott Payne downplayed the findings of the state report. He said it looks at the seven-county metro and “doesn’t get down to the level of granularity to give a specific factual basis for its number in Minneapolis.”
“Our report is modeled on a framework that is based in Seattle but we use parameters that are city-specific,” Payne said.
The ordinance’s authors — Council Member Robin Wonsley, Jason Chavez, and Jamal Osman — said their decision to override the mayor’s veto showed they chose to stand with workers over corporate interests.
Asked what they would tell drivers if the companies do pull out of the metro area, Wonsley said there are a number of other companies willing to fill their place. Those companies will likely struggle to fill the void left by the two companies, at least in the immediate future, Axios reported.
State lawmakers will now face pressure from the companies to override Minneapolis.
House Majority Leader Jamie Long, DFL-Minneapolis, told the Reformer he doesn’t support preemption, but Walz told Axios he was considering it.
Republican lawmakers announced they would introduce a bill preempting the Minneapolis ordinance on Thursday.
Voting to override the veto were Council Members Wonsley, Chavez, Osman, Payne, Andrea Jenkins, Aisha Chughtai, Jeremiah Ellison, Katie Cashman, Emily Koski and Aurin Chowdhury. Voting against were Council Members Michael Rainville, LaTrisha Vetaw and Linea Palmisano.
