For the third time in the past year, rideshare drivers, many of whom are of East African descent, celebrated yet another win for something they’ve been fighting for—a minimum wage. On March 7, gathering in the temporary City Council chambers at the Public Service Building across from City Hall, they cheered and hoisted leaders, including Councilmember Jamal Osman, to celebrate.
The next day, Mayor Jacob Frey vetoed the ordinance yet again. The ordinance, which city councilmembers voted to pass 9-5, would increase the minimum compensation for rideshare drivers to $1.40 per loaded mile plus 51 cents per minute starting May 1.
Drivers have complained about spending most of their earnings to maintain their vehicles instead of taking care of their families. But Mayor Frey wants an ordinance that would be fair to Uber and Lyft, who threaten to leave the city as the ordinance takes effect. It remains to be seen what fairness looks like since the Minnesota Department of Labor and Industry released a report on how much drivers are compensated and how they should be compensated according to Minneapolis’ minimum wage.
What does fair compensation look like?
According to a report published Friday by MnDLI, rideshare drivers in the seven-county Twin Cities area earned an average of $52.94 per hour in 2022. But rideshare drivers only took home 27 percent of that after expenses and mileage, $14.48 per hour. In 2022, the Minneapolis minimum wage for large businesses was $14.25 per hour until June 30, and $15 per hour on July 1 and after.
Some drivers say they take home even less. “We get only 30 percent from [what the customer pays]. And that’s 30 percent we get…to pay the bills and for the gas and maintenance of the car. Uber uses us as slaves,” said rideshare driver Ahmed Ahmed.
Last session, state legislators passed a bill requiring rideshare drivers to be compensated $1.45 per mile and 34 cents per minute if a trip started in the Twin Cities. Gov. Tim Walz vetoed the bill, instead convening a committee of rideshare drivers and industry representatives to devise recommendations for a bill. The committee did not make a recommendation, partly because they did not have the Department of Labor report published on Friday.
So the city took matters into its own hands. Councilmembers conducted a study to determine what fair compensation looked like. They passed an ordinance last August mandating rideshare drivers get paid $1.40 per mile plus 51 cents per minute, with a $5 minimum fare.
That ordinance was vetoed by the mayor and did not survive a vote to override. After the city auditor devised models on how fair compensation should look, council members tried again this year. The ordinance passed on March 8 on a 9-4 vote.
Councilmember Latrisha Vetaw, one of four councilmembers who voted against the ordinance last Thursday, believed drivers were already making Minneapolis minimum wage based on what she heard from drivers who live in her ward.
“I have conversations with [rideshare drivers] in my ward. Folks have shown me receipts from the apps. I have not seen anyone show me that they’ve made less than $15 an hour,” said Vetaw, adding she spoke with a driver who made $45,000, $6,000 of which is taxable income, from driving rideshare last year.
Why do Uber and Lyft want to leave?
Uber and Lyft have threatened to leave Minneapolis if the minimum compensation ordinance passes. Both companies say city councilmembers failed to work with them to devise a fair minimum wage standard.
“We support a minimum earnings standard for drivers, but it must be done in a way that allows the service to sustainably and affordably operate for riders,” said Lyft spokesperson CJ Macklin. Lyft says they pledged to dedicate 70% of fare revenue towards the income of drivers, while Uber says they support legislation that guarantees drivers $35 per hour.
Frey echoed those concerns in a letter he wrote explaining his veto on March 8. “I am deeply concerned that if this ordinance becomes law, [they] will cease operations or only offer luxury services in Minneapolis. This could cause great harm to those who depend on [Uber and Lyft] for transportation,” he said.
Drivers and some councilmembers have called Uber and Lyft threats to leave a bluff, saying they didn’t leave Seattle or New York when they threatened to do so. “Rideshare companies tend to use these tactics saying that they will leave cities when residents are pushing for fair wages. Our drivers deserve to be paid fairly,” added Chavez.
Next steps
Mayor Frey has called for a special city council meeting for members to attempt to override his veto on March 14. Though the ordinance passed 9-4, a veto-proof majority, it remains to be seen if they can hold that majority.
The fate of the ordinance may rest with Councilmember Andrea Jenkins. Though she has been a swing vote on issues in the past and has generally aligned with the mayor on issues, she voted to pass and override the veto of the minimum compensation ordinance the last time around. It’s unclear if the report released by DLI last Friday will affect how she votes, as she hadn’t seen it when the MSR contacted her about it this past weekend.
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