Minneapolis City Council votes to boost rideshare driver pay by veto proof majority

Mayor Jacob Frey swiftly announces intent to veto ordinance

Signs at MSP terminal direct people to both taxis and ride shares.
Signs in the MSP terminal on the transit level direct people to both taxis and ride shares, on Feb. 23.
Regina McCombs | MPR News 2018

Updated: 2:20 p.m.

A supermajority of the Minneapolis City Council voted Thursday afternoon to approve an ordinance that would boost rideshare driver pay and require employee protections within city limits. 

The ordinance largely mirrors one passed by the council last year that was vetoed by Minneapolis Mayor Jacob Frey. It would boost rideshare driver pay to 51 cents per minute and $1.40 a mile, with a minimum of $5 for each fare. Supporters say it would ensure that drivers are paid at least as much as is required by the city’s minimum wage policy. 

Council Member Jason Chavez said the city shouldn’t put the interests of corporations ahead of those of its residents. 

“That conversation is about paying unfair wages to residents of Minneapolis and it means nothing to our workers when the offer on the table is still poverty,” Chavez said. This “is an opportunity for our workers in Minneapolis to be uplifted, many of whom are being paid poverty wages and deserve this ordinance to keep a roof over their heads, food on the table, to pay their childcare, support their families and more.”

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The ordinance would also require that 80 percent of any fees for canceled rides be paid to drivers and exempt tips from minimum compensation. It would go into effect on May 1. 

At a Business, Housing and Zoning Committee meeting last week, Eid Ali, who heads up MULDA (Minnesota Uber/Lyft Drivers Association), urged council members to support the ordinance in line with the city’s historic support for labor rights. Ali said drivers have been increasingly struggling to take care of their families.    

“I’m not asking here for anything more than I should get,” Ali said. “I believe in working, and working hard, and that’s what I’ve been doing, but what’s been missing in this equation is fairness because when I work hard I deserve to get what I worked for.” 

But the companies say it would make the services too expensive for many riders. Lyft said in a statement last week that the ordinance “ignores economic reality” and could make rides more expensive for many riders. The company threatened to stop serving Minneapolis and possibly the whole state if the ordinance passes. 

The 9-4 vote sets up yet another showdown with Minneapolis Mayor Jacob Frey, who has said he supports increased pay for drivers but doesn’t believe the council policy is balanced. Frey said the rideshare companies, Uber and Lyft, should have been consulted while the ordinance was being crafted. 

“We need to be making our decisions based on data,” Frey said earlier this week. “In the very near future the state of Minnesota will be issuing a whole boatload of data that gives real analysis and information about how much drivers are actually making, where they’re making that money and potentially how to craft an ordinance around it — we should use that data to create an ordinance.” 

In a statement announcing his intent to issue a veto, Frey repeated his opposition. “The statewide report is literally going to be released tomorrow. It’s irresponsible to pass policy today when we’ll have the data tomorrow.”

The statewide analysis of rideshare services is expected to be released on Friday, according to a spokesperson for the state Department of Labor and Industry. Council member Emily Koski proposed delaying the vote for two weeks in order to allow the city to consider the data produced by the report. But that motion was defeated.

Council Member Robin Wonsley said the state and city will likely have separate policies like they do with minimum wage policies, but that the state report could be helpful when lawmakers craft a separate statewide policy.

Frey urged council members to compromise in enacting a policy to avoid any possible state preemption of the city’s ordinance, which would erase any city-required benefits for drivers. Minneapolis City Attorney Kristyn Anderson told council members that state law supersedes local law when they conflict, but that lawmakers could write in an exception. The mayor supports an increase to $1.20 a mile and 34 cents a minute.

“I don’t care about their bottom line,” Frey said of the rideshare companies. “I do care about having this service in the city, I do care about getting drivers paid more money, and I do care that the service itself is actually affordable for the people who need it.” 

Council Member Linea Palmisano opposed the ordinance and said she wasn’t interested in calling the companies’ bluff that they will stop service.

“I really don’t think that Minneapolis is leading the way here. I think that it’s tempting massive upheaval, and I think it’s tempting preemption, and I don’t think that it’s helpful as the state works hard to get broad enough support to pass something that’s really an issue, that’s really regional,” she said.

Council Member Aisha Chughtai argued that action on an ordinance like this has already been delayed multiple times, and that an eventual state policy could complement the city’s ordinance. 

“I have a lot of trust in our staff at the city of Minneapolis that put in work over the last year into determining how to put together this policy, and I have a lot of trust that Minneapolis staff are looking specifically at the impact in Minneapolis, while statewide staff are looking at the impact on the entire state,” Chughtai said. “While those two things go hand in hand, our job here is to focus on Minneapolis.” 

Council President Elliott Payne said the rideshare companies have been growing at the expense of drivers for a decade and it’s time to start regulating them. 

“We have a responsibility as elected leaders to think about the interests that go beyond the profitability of any individual corporation,” Payne said. “We have to think about the interests of our residents and them being able to live fulfilling lives in our city.” 

The disagreement between supporters and opponents of the ordinance is a repeat of a drama that played out last year after the council passed similar legislation, which was vetoed by the mayor following threats from rideshare companies to pull out of the state. In that case, the ordinance’s supporters weren’t able to muster the votes to override the mayor’s veto. But the council majority has shifted since last term in favor of the council members supporting the policy. 

Other groups have weighed in on the ordinance. If Uber and Lyft leave, about 8,000 people with disabilities could lose access to rideshares if the companies leave the state, said Sheri Wegner, the executive director of ConnectAbility of MN, which provides services for people with physical or cognitive abilities. 

“If people with disabilities lose the ability to have this transportation, that’s going to lose potential employment, which is going to lose stable housing, food sourcing,” Wegner said. “Then they’re not going to be able to get to mental health and physical health appointments, they’re not going to be able to engage in their community, which is going to go back into isolation, which is going to increase physical issues and mental issues.”

The Minneapolis Downtown Council, Hospitality Minnesota, the Minnesota Licensed Beverage Association also filed comments with the council opposing the ordinance. 

Council Members Michael Rainville, Linea Palmisano, LaTrisha Vetaw and Emily Koski voted against the ordinance, although Koski said she might reconsider her position if the mayor vetoes it after the release of the state analysis. Council Members Jeremiah Ellison, Elliott Payne, Aisha Chughtai, Aurin Chowdhury, Robin Wonsley, Andrea Jenkins, Katie Cashman, Jamal Osman and Jason Chavez voted in favor of the ordinance.

Rideshare drivers have pushed aggressively for a city ordinance after statewide legislation was vetoed by Gov. Tim Walz after the rideshare companies threatened to pull out of the state. A working group formed by the governor that included representatives for drivers and the rideshare companies settled on few substantial recommendations for new legislation.