Politics and Government

Rideshare drivers find themselves at similar crossroads 1 year after Walz veto

Two men embrace
Rideshare driver and MULDA member Farhan Badel embraces a supporter after testifying during a Labor and Industry Finance and Policy Committee meeting in St. Paul on Tuesday.
Ben Hovland | MPR News

One year ago, rideshare drivers descended on the state Capitol and gathered regularly outside DFL Gov. Tim Walz’s office to apply pressure on legislation that would offer them better pay and more job security.

A bill reached his desk late in session and Walz left them guessing about his intentions. Then, he issued his first and still-only veto in his time as governor. 

“I look forward to working with the legislature to develop solutions that deliver on the promise of fair compensation and safe working conditions for drivers while still providing affordable transportation options for Minnesotans,” Walz wrote in his veto letter.

Upset but not deterred, drivers kept up the campaign and put their energy into passing a Minneapolis ordinance that now has state leaders — including Walz — searching for a statewide compromise amid threats by industry players Uber and Lyft to pull out of the market come July. 

The scars from last year’s fight and all that’s happened since are on display as the Legislature reaches a crossroads and decision point again. Sometime next week, lawmakers intend to vote on bills that would set minimum pay standards and give drivers more leverage when their employment is at stake.

Farhan Badel was one of many rideshare drivers who spoke to lawmakers at a legislative hearing on Tuesday where a new driver rate was passed. Another House panel moved it along on Friday.

Uber and Lyft stickers on a black car
Uber and Lyft stickers are prominently displayed on driver Farhan Badel’s Toyota Camry as he drives during a shift in Minneapolis on March 28.
Ben Hovland | MPR News

“I’ve been driving for five years, I’m a father of three. This is my full-time job,” Badel told members of the House Labor Committee. He said the well-financed companies “should not dictate what becomes state law.”

But what the companies do and whether they sign onto an eventual compromise remains an unanswered question.

While Uber and Lyft have said they agree with a lot of terms of the latest proposal, like insurance for drivers, they say the current legislation moving forward at the Capitol requiring $1.27 cents per mile and $0.49 per minute is still too high.

“We are not writing on a blank sheet of paper,” Joel Carlson, a lobbyist for Uber, said in a committee hearing this week. “We have this experience in other cities and we know that when you price rides out of the reach of riders, that utilization goes down.”

A man in a suit prepares to testify at a desk
Joel Carlson, a lobbyist for Uber, prepares to testify during a Labor and Industry Finance and Policy Committee meeting in St. Paul on Tuesday.
Ben Hovland | MPR News

Meanwhile, negotiations away from the public hearings continue in private. 

Drivers have been stressing to lawmakers that being a rideshare driver is no longer just a part-time job and that they have to pay for their own expenses and taxes. 

Statistics show most rideshare drivers in the Twin Cities metro area are people of color, immigrants and living below the poverty line. Rep. Hodan Hassan, DFL-Minneapolis, brought the bill before the House and the workers are “deserving of our protections.”

Last year, Uber and Lyft drivers came to the Capitol, day after day, to chant outside Walz’s office to encourage him to sign the bill that he turned back. At the same time, Walz ordered a commission to study the issue and release recommendations.

“It was hurtful, but we still remain optimistic because the drivers remain unwavering,” said Sen. Omar Fateh, DFL-Minneapolis, who has championed the legislation in the Senate.

Fateh said the rideshare companies have not answered if they would be profitable even at the higher proposed Minneapolis City Council rate. The city’s ordinance won't take effect until July 1.

“My guess is yes, they are still profitable. So it will make no sense for them to exit our state knowing that there’s money still out there,” Fateh said. 

A House committee sits at a large table
The Labor and Industry Finance and Policy Committee hears testimony regarding HF4746 during a meeting in St. Paul on Tuesday.
Ben Hovland | MPR News

Republicans in both chambers say the situation could be avoided completely.

“This is a Democrat-created crisis,” said Sen. Jordan Rasmusson, R-Fergus Falls, who believes the rideshare companies are not bluffing about leaving the state. Democrats, he added, “are playing a very dangerous game of chicken.”

Rasmusson said Minnesota should have a statewide policy to keep the services in the state.

“I think there are more conversations to happen and I hope we can get a solution,” Walz said this week. 

House Majority Leader Jamie Long expressed confidence Thursday that a deal could be struck in the final week.

“I think that we’re going to get to a place where we can pass a bill that will have companies stay, and that is going to protect the rights of our cities,” Long said, adding that adjustments could be made in a final committee stop.  “We’re not going to pass a version that we’re not sure will be signed into law. So we’re still working on that.”

A phone sits on a dashboard car mount
Rideshare driver Farhan Badel pulls up a job on the Lyft driver app, displaying a $7 fee for a ride from downtown Minneapolis to Minneapolis-St. Paul International Airport, during his shift on March 28.
Ben Hovland | MPR News

The debate in Minnesota illustrates how the gig economy has evolved from a side hustle to a primary source of income for many workers, said Professor Erin Hatton, who studies labor and employment issues at the University of Buffalo in New York. 

However, the shift has led to issues such as income instability and hidden costs for the workers.

“If Minneapolis is a one-off here, there’s not going to be much of a threat to [rideshare companies’] way of doing business,” Hatton said. “But in the longer term if we can take a broader, more expansive approach, then the companies, in order to survive, would have to comply.”

She also noted that the companies have always said from the beginning of their existence that a minimum wage would kill business.

The legislation House Ways and Means committee gave it the final committee approval on Friday and it could hit the floor of both chambers next week. 

Then Walz could hear those familiar driver chants echo outside his office again.