Mpls. City Council approves pay hikes for rideshare drivers

The Minneapolis City Council approved new rules Thursday that would make ride-share workers among the highest paid in the country — but they face a possible veto by Mayor Jacob Frey.

The 7-5 vote was met with cheers from dozens of supporters, who have championed the measure as a victory for dignity and fair wages. Opponents, however, worry that the move could lead to unaffordable fares, hurt driver income and disproportionately affect lower-income riders.

In advance of the vote, Uber and Lyft threatened to vastly curtail service or pull out of Minneapolis should the city approve the ordinance — a threat they've made elsewhere but not always carried out.

Council President Andrea Jenkins and Council Members Elliott Payne, Robin Wonsley, Jamal Osman, Jason Chavez, Aisha Chughtai and Jeremiah Ellison voted in favor of the ordinance, while council Vice President Linea Palmisano and Council Members Michael Rainville, LaTrisha Vetaw, Emily Koski and Andrew Johnson voted no. Council Member Lisa Goodman was absent for the vote; she told the Star Tribune she has "concerns" with the ordinance.

Frey has expressed strong reservations about the ordinance, but has not yet said whether he'll veto it. A Frey spokeswoman said Thursday "he needs time to review the ordinance and the amendments made to it." He has until noon Wednesday to act. Nine votes would be needed to override a veto.

After the vote, a group of drivers milled about outside the mayor's office; they plan to camp out inside City Hall in hopes of pressuring Frey to support the ordinance. Meanwhile, Lyft released a statement urging a veto and calling for a "broader statewide solution".

"If it becomes law, drivers would ultimately earn less because prices could double and only the most wealthy could still afford a ride," the statement read.

The Minneapolis ordinance is modeled after measures in Seattle, Chicago and New York and would affect the local rideshare scene in multiple ways.

Goal: minimum wage

The push for change is based on the argument that drivers, who are not considered employees of the companies and are often East African immigrants, are being exploited – paid paltry wages, given little job security and bear the added expense of fuel and maintenance for their personal vehicles.

Proponents say the changes would ensure drivers are paid at least the equivalent of minimum wage, which is either $14.50 or $15.19 an hour in Minneapolis, depending on company size.

"It's simple, colleagues: Voting no is against minimum wage workers in Minneapolis," Chavez said, in favor of the move.

The facts are unclear. Uber advertises median hourly earnings of $24.56 in Minneapolis, including tips. But numerous drivers Thursday insisted they earn well below minimum wage, "or else we wouldn't be here today," driver Marianna Brown said. One driver, Ahmed Ahmed, showed a screenshot of his pre-tip earnings – $4.94 for 21 minutes – that would equate to $14.11 per hour.

Here's what the ordinance would do:

For drivers

The region's estimated 1,500 drivers for rideshare services would be guaranteed the following for trips within Minneapolis:

At least $1.40 a mile plus 51 cents a minute while a passenger is in the vehicle, up from 60 cents per mile and 19 cents per minute.Minimum of $5 a trip and 80% of fees collected when trips are canceled.Tips protected from any company deductions.New employment protections, including five days advance warning and an appeals process for those being terminated, known as "deactivation."

For riders

Parts of the ordinance would also affect them as well:

Drivers convicted of certain felonies will be permanently deactivated. In response to concerns about such drivers, proponents introduced a change allowing companies to immediately "temporarily deactivate a driver for a major infraction that endangers public safety."Riders will pay more, the companies say. A Lyft official said some rides, such as a $20 trip, would cost $40. Critics of the companies contend they'll raise fares regardless.Riders and drivers would get receipts for how much the rider was charged, how much the driver earned, and how much went to the company.

For the city

The ordinance would bring the most prominent sector of the gig economy under unprecedented regulatory scrutiny. Companies would submit reports to the city including:

How much riders are paying, drivers are being paid and how promptly rides are arriving.Where trips were taken, including census tract information to highlight service for poorer and underserved neighborhoods.Rates of wheelchair-accessible vehicle requests and whether companies were able to provide such rides.Notification of criminal investigations and data on customer complaints.

The data would not be public under state open records laws, the ordinance contends.

Neither the ordinance nor Frey's recently released budget plan fund city staff to oversee data collection or an envisioned "driver resource center." Chughtai suggested the City Council could create such funding as it seeks to modify Frey's proposal.

In May, Gov. Tim Walz vetoed legislation passed by fellow Democrats that would have created similar regulations statewide, citing concerns over transportation access for poor and disabled people, and a lack of hard data on driver and company earnings.

Walz formed a task force to study the issue and provide recommendations this winter.