Minneapolis Mayor Jacob Frey vetoed a proposed ordinance that would have significantly raised the minimum wage for rideshare drivers, and included additional protective measures, after months of debate that led to Uber and Lyft threatening to reduce service or pull out of the city entirely.
Frey’s veto came just days after the Minneapolis City Council voted 7-5 to approve the ordinance, and wasn’t a surprise after the mayor sent a letter to council leaders urging more debate before making an official decision.
Throughout the process, the mayor repeatedly stated that he supported higher pay and better working conditions for drivers, but stressed his fear of unintended consequences from the proposal after eight months of study.
Minneapolis Mayor Jacob Frey vetoed the city’s proposed rideshare ordinance.
“We need both additional data and conversations to be had to ensure the essential safety and well-being of rideshare drivers and riders alike,” Frey said. “Drivers should be paid more, and their working conditions should be improved. We collectively support improved wages and working conditions for rideshare drivers. It is equally important to me that we support and maintain a safe environment for drivers and riders, guard against unintended consequences in policymaking, and maintain access to rideshare services for all those who rely upon it.”
According to Frey, some of those negative potential consequences included stricter identification measures and the use of gift cards, which he said could involve government and non-profit services occasionally using gift cards to provide rides to clients.
He also said a requirement for passengers to have credit cards in their name would “eliminate the option to have a family member or healthcare team member arrange and pay for transportation for a person with a disability.”
When the mayor’s office announced the veto, it added that Uber committed to pay its Minneapolis drivers a rate that equates to at least minimum wage, with no driver making less than $5 for any trip in Minneapolis—starting immediately.
An Uber spokesperson told Food On Demand the proposed measure would have left tens of thousands of riders stranded and put thousands of drivers out of work. They added that median hourly driver earnings in Minneapolis (from April 1 to June 30, 2023) was $32.25 excluding tips, specifying that this was for engaged time when a driver was en route to a passenger or had one in the car.
During this same time period, Uber said it received an average service fee of 12 percent, which was lower than its global average service fee of 21 percent.
“It remains our goal to pass comprehensive, statewide legislation that will raise rates for drivers without sacrificing ridership. In that effort, we look forward to continued work on the Governor’s Task Force,” Uber said. “In the meantime, for engaged time in Minneapolis, Uber will guarantee all drivers will earn at least the equivalent of the Minneapolis minimum wage, with no trip fare resulting in less than $5. We appreciate Mayor Frey’s thoughtful approach and the opportunity to continue working together to get this right and hope the Minnesota legislature quickly passes a statewide compromise in February.”
In an interview with St. Paul-based Sahan Journal, Eid Ali, president of the Minnesota Uber/Lyft Drivers Association, said news of the veto was “disappointing” after months of effort trying to build support for the ordinance.
“It’s a little bit of a gray day for thousands of families who were expecting a different outcome, but it is what it is and we are going to work on some of the alternatives that we think we have ahead of us, and we’ll move on and go from there,” Eid said.
