Find a fix for rideshare fail

Opinion editor’s note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.

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Now that the Minneapolis City Council has ill-advisedly voted to require an excessive minimum wage for rideshare drivers — and Uber and Lyft say they’ll pull out of town on May 1 — we hope common sense will prevail over the next six weeks.

Mayor Jacob Frey, the council and rideshare drivers should continue to negotiate and come up with a more reasonable rate. Barring that, Gov. Tim Walz and the Legislature should step in and adopt a statewide rideshare rate that would preempt the city’s decision.

The council approved guaranteeing a floor of $1.40 per mile, and 51 cents per minute, with drivers of wheelchair-accessible vehicles receiving $1.81 per mile. Frey had urged a minimum payment of $1.20 per mile, and 35 cents per minute.

The approved ordinance includes the higher rates along with a $5 minimum payment for any ride, annual increases for drivers and restrictions on how money can be deducted from drivers’ wages.

Frey had vetoed that plan, but on Thursday council members voted 10 to 3 to override his action. So, if nothing is done to modify the terms or dates between now and then, the council plan will go into effect May 1.

Following the vote, Uber said that on May 1 it will “stop operating a transportation network in the entire metro area including the airport.” Lyft said it would cease operations in Minneapolis.

It’s not known whether the companies are bluffing, or if they will actually leave this lucrative market. But if they do, and there is no similar option to replace them, it could cause serious transportation problems for the entire region.

Frey told an editorial writer that the absence of the companies could be a safety problem in that many people use the service after they’ve had “one drink too many” instead of getting behind the wheel. And many disabled people and seniors rely heavily on Uber or Lyft, as well as people coming back and forth from the airport.

“We all want to see the drivers get a pay increase, but we have to work with all involved — including the companies — to do that,” he said. Frey added that a pay raise won’t matter if the companies leave.

Frey is justifiably frustrated that the council ignored a state-commissioned, comprehensive study of rideshare operations that included detailed data on driver earnings from more than 18 million Minnesota rides in 2022 — far more detailed data than anything previously examined at the state or local level.

It largely validated the narrative of many drivers, who are considered independent contractors: After considering vehicle wear-and-tear, time spent driving to and from rides, and the cost of gas and other expenses, drivers earn well below the minimum wage.

The study suggested that paying drivers $1.21 per mile, and 49 cents per minute, for rides across the metro would not only meet the equivalent of Minneapolis’ $15.57 hourly minimum wage, it would cover expenses and benefits such as paid leave, health insurance and retirement savings.

Frey said he would continue to try to work with all the stakeholders to make changes in the ordinance. And at the state level, Walz last year vetoed a similar bill — in the first veto of his tenure — that would have increased pay and job protections for drivers statewide. That bill would have required drivers to be paid $1.45 a mile, and 34 cents per minute. At that time, Uber and Lyft said ride prices could increase significantly if the bill became law statewide.

On Wednesday, a Senate committee approved a plan to adopt statewide rideshare minimums. And following Thursday’s council vote, Republicans who represent suburban districts in the House said they plan to introduce a bill to preempt local governments from passing similar rideshare pay ordinances.

As the Star Tribune Editorial Board has previously argued, it was right for both Walz and Frey to veto previous measures so that more acceptable compromises could be found. We hope that will happen in the wake of this week’s vote — either through further negotiations or state action — so that Uber and Lyft can continue to be part of the state’s transportation system.