Minneapolis mayor vetoes minimum wage proposal for Uber, Lyft drivers

The mayor of Minneapolis has vetoed an ordinance approved last week by Minneapolis City Council to establish a minimum per-mile pay rate for Uber and Lyft drivers in the city.

Instead, Mayor Jacob Frey announced an agreement with Uber (NYSE: UBER) that will guarantee a pay rate to its drivers that will equate to the Minneapolis minimum wage, which, depending on company size, is either side of $15 an hour. The agreement on a minimum wage appears to only apply to Uber, as Lyft has not indicated it will sign on to that standard.

FreightWaves was not able to obtain a copy of Frey’s statement issued after the veto. Media reports that quoted the statement said Frey said he had spoken with many people, including “riders [and] advocates.”: “From the feedback we gathered, it’s clear we need more time to get this right,” Frey’s statement said. “In the coming weeks, we will work in partnership with all stakeholders to do our homework, deliberate and make sure we put together an ordinance that is data-driven and clearly articulates policies based on known impacts, not speculation.”

Uber’s statement confirmed the agreement on the Minneapolis minimum wage, which also has a provision that requires each trip to have a fare of at least $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,” Uber said.

A statewide effort to impose a minimum rate was vetoed by Gov. Tim Walz earlier this year.

The $5 minimum and the minimum wage requirement were part of the ordinance passed by the Minneapolis City Council on a 7-5 vote. But it also required a rate of $1.40 per mile, which is only about 17 cents per mile less than truckload carriers are now receiving excluding fuel, according to SONAR’s NTIL.USA data stream. That rate stood at $1.57 a mile on Wednesday.

Uber, in releasing its statement on the veto, said its median driver earnings per hour in the second quarter were $32.55 excluding tips. That covers only engaged time, which Uber defined as “when a driver was en route to a passenger or had a passenger in the car.”

Lyft (NASDAQ: LYFT) had said it would depart from Minneapolis by the end of the year if the ordinance was signed by the mayor.

“Mayor Frey was right to listen to drivers, riders and our communities and reject the proposal,” Lyft said in a statement. “By attempting to jam through this deeply-flawed bill in less than a month, it threatened rideshare operating within the city. We support a minimum earning standard for drivers, but it should be part of a broader policy framework that balances the needs of riders and drivers.”

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