Minneapolis mayor vetoes rideshare ordinance, but also said Uber has agreed to guarantee drivers make a minimum wage

Minneapolis Mayor Jacob Frey on Tuesday vetoed an ordinance that would have locked in higher pay and job protections for Uber and Lyft drivers while operating within the city limits – a move that was followed by threats the rideshare companies to pull out of Minneapolis if the proposal took effect.

However, Frey also said in a statement that Uber has committed to – effective immediately – guarantee that drivers operating within the city limits “will earn at least Minneapolis minimum wage,” and that no driver in the Twin Cities metro will make any less than $5 for any trip, no matter how short.

The mayor also promised to start drafting “a new ordinance” that would seemingly aim to codify this agreement.

“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,” Frey said in a statement.

In a statement, Uber spokesperson Freddi Goldstein confirmed the company has agreed to pay drivers the equivalent of Minneapolis’ minimum wage – $15.19 per hour – for “time spent en route to a passenger and while a passenger is in the vehicle.”

The mayor’s decision marks yet another last-minute defeat this year for the Minnesota Uber & Lyft Drivers Association. Three months ago, the advocacy group successfully lobbied the state Legislature to pass a statewide rideshare driver bill only for Gov. Tim Walz to veto the measure in the end. In that case, too, Uber and Lyft had threatened to scale back operations in Minnesota.

The Minneapolis City Council approved the ordinance last week, but with the support of only seven of the council’s 13 members. Overturning the mayor’s veto would take a supermajority of nine votes.

“Drivers are disappointed and angered by Mayor Frey’s decision,” said Eid Ali, president of the Minnesota Uber & Lyft Drivers Association, in a statement Tuesday night. “We are unclear as to what the mayor claims to have won and believe the path set forth by the City Council was the best way to address the crisis” facing drivers in the city — who, the statement went on to point out, are mostly people of color.

Ahead of the council’s vote, Frey had raised a series of concerns, including that the City Council’s proposal could create safety risks for riders. Frey had said he shared supporters’ desire to pay drivers more, but the mayor and other critics felt the now-vetoed ordinance needed more work.

“I believed we could craft a policy that both leads in advocacy of worker’s rights and maintains service for those who greatly depend on this for their day-to-day needs; sadly, this proposal did not accomplish that,” said City Council Vice President Linea Palmisano, Ward 13, one of six council members also quoted in the statement from the mayor’s office.

“Riders want more of their fare to go into the driver’s pocket,” Palmisano added. “Yet many feel the increase in cost with this particular ordinance will entirely remove their ability to use [rideshare services].”

The mayor also said he didn’t want to preempt the work of a task force that Walz created after his veto of the statewide legislation. The governor has tasked that group, which includes both drivers and Uber and Lyft representatives, with recommending a new statewide rideshare policy before the start of next year’s legislative session.

Frey had also urged council members to delay the ordinance from taking effect until after the legislative session concluded. The ordinance’s supporters had refused.

“This veto is an inexcusable betrayal of Minneapolis workers,” said council member Robin Wonsley, Ward 2, who co-authored the proposal. “As a council member, Jacob Frey voted to approve a $15 minimum wage, but evidently he is ready to abandon any commitment to living wages or workers’ rights under the pressure of lobbying by multibillion-dollar out-of-state corporations.”

Other supporters of the original ordinance questioned the agreement Frey had struck with Uber.

“Uber and Lyft had the ability to pay living wages to their drivers this whole time but chose not to until the threat of regulation forced their hand. Do you trust their commitment?” tweeted council member Elliott Payne, Ward 1.

The arguments for and against the original ordinance

Minneapolis’ proposal, carried by council members Wonsley, Jason Chavez, Ward 9, and Jamal Osman, Ward 6, was largely similar to the statewide legislation. If enacted, the ordinance would’ve mandated rideshare companies pay drivers at least $1.40 per mile, plus 55 cents per minute, while they’re operating in Minneapolis – a change that, at least according to some advocacy groups, could have easily tripled drivers’ pay.

The proposal also would’ve granted other job protections to drivers. For instance, the ordinance laid out a process that rideshare companies would have had to follow to deactivate a driver – a process that would’ve given the driver a chance to meet with the company to argue for their reinstatement. Under the current system, drivers complain that a report from one irritated customer can threaten their livelihood.

Uber and Lyft objected to the ordinance, saying they would have been forced to pass along the costs to riders. In written comments, Lyft representative Brent Kent said the cost of a trip would likely have doubled, making “rides in low-income Minneapolis neighborhoods … more expensive than a cab in Manhattan.”

Another group of rideshare drivers, the Minnesota Rideshare Drivers Association, worried this fare increase would decrease rider demand and ultimately hurt their incomes. This group’s leaders argued for an approach that was in some ways more conciliatory toward the rideshare companies, though they still demanded substantial minimum pay increases and some job protections – like better company-provided insurance – that the ordinance didn’t contemplate.

The rideshare companies also had argued the deactivation provisions would have caused safety concerns for riders. Kent argued the proposed ordinance would delay the company from removing even drivers “reported for a serious safety issue.” Frey had echoed these concerns, saying that serious accusations should sometimes be enough to temporarily deactivate a driver.

The council authors had argued this safety claim was overblown, noting their ordinance listed several criminal convictions that should permanently disqualify a driver. That said, the council also approved an amendment Aug. 17 that clarified rideshare companies would be allowed to “temporarily deactivate a driver for a major infraction that endangers public safety.” After the vote, Wonsley contended this amendment offered further clarity on the issue.

Was there a path to approval?

Ahead of the vote, Frey had listed other concerns as well. He worried that provisions banning the use of gift cards might hamper service providers who use them to help low-income riders get to jobs or health care appointments. He noted there was no funding set aside for a promised Drivers Resource Center, which would help advocate for drivers in deactivation hearings. He wondered why the ordinance didn’t include requirements for paid sick leave or higher occupational insurance limits for drivers.

Ward 12 Council Member Andrew Johnson voted against the ordinance on Thursday, saying he opposed enacting new rideshare regulations before the governor’s task force weighed in – but Johnson also questioned why council supporters didn’t take Frey up on a clear offer to compromise.

“If you want to ultimately get this passed sooner than later I would recommend that collaboration directly with the mayor who has raised concerns but also signaled a path for approval,” said Johnson.

But supporters objected to the idea of asking drivers to wait longer for higher compensation – and appeared ready to force the mayor into a take-it-or-leave-it decision.

“The path to approval is super simple today: We stop the delaying tactics,” said Chavez, who represents Ward 9. “The mayor can either decide to sign it or veto it. He can support immigrant workers or stand with the Downtown Council. That is his decision and his decision alone to make.”

Ultimately, council members Aisha Chughtai (Ward 10), Jeremiah Ellison (Ward 5), Andrea Jenkins (Ward 8) and Payne joined the three co-authors in voting for the measure.

Those opposed were council members Johnson, Emily Koski (Ward 11), Linea Palmisano (Ward 13), LaTrisha Vetaw (Ward 4) and Michael Rainville (Ward 3). Ward 7’s Lisa Goodman was absent.

This story was updated after publication to include a statement from the Minnesota Uber & Lyft Drivers Association.