Pay rates for Uber and Lyft drivers now law after two-year fight

Advocates celebrated a law that sets pay minimums for Uber and Lyft drivers and provides the drivers with new insurance provisions, but does not lock drivers into independent-contractor status, during a ceremonial bill signing Tuesday.

Gov. Tim Walz had already signed the bill as part of a 1,400-page package on Friday.

In March, the Minneapolis City Council voted to set pay minimums, prompting Uber and Lyft to threaten to leave the city unless a statewide law was passed with lower rates than what Minneapolis wanted. After months of high-wire negotiations as the companies dug in their heels and state legislators worked to persuade Minneapolis council members to accept lower pay for drivers, the Legislature passed a deal in the waning hours of the 2024 session.

“If it was easy, everybody else would have done it,” said Walz, who vetoed a similar measure last year.

The rates of $1.28 per mile and 31 cents per minute are lower than what drivers’ advocates had hoped for, but DFL leaders say the law will mean drivers’ pay will rise about 20% when the rates take effect Dec. 1.

The new rates preempt a higher rate set by the Minneapolis City Council in March, and will apply not just to Uber and Lyft, but to all similar ride-hailing companies, including those that have set up shop in Minneapolis in recent weeks such as Wridz and MyWeels.

Minnesota’s law includes a provision saying that the law neither requires drivers to remain independent contractors nor makes them employees of Uber or Lyft. Maintaining drivers’ status as contractors, ineligible for overtime or benefits like health insurance, has been a priority for the companies in other statewide regulations, including a pay minimum law in Washington state and a ballot measure passed in California in 2022.

The bill also includes a requirement that the companies provide a new kind of insurance for drivers attacked on the job, another key priority for drivers who say the companies have been little help after the drivers were assaulted or caught in gunfire, and unable to work for months. The insurance was a provision both companies and drivers’ groups agreed to during meetings of a ride-hailing task force last year.

Walz said he saw the new pay minimums and other protections for drivers as part of Minnesota’s legacy of fighting for workers, and for immigrants who accept difficult jobs in the United States.

“The jobs you can get are the jobs you take, but the jobs shouldn’t kill you,” Walz said.

Eid Ali, president of the Minnesota Uber/Lyft Drivers Association and one of the chief drivers’ advocates, said the pay increase will be meaningful to drivers who are trying to support families by driving. A study commissioned by the state Department of Labor and Industry in March found that a majority of drivers drive full-time. Ali said most of the drivers his association represents drive 12 to 14 hours per day.

“I don’t think this is a gig economy or gig work,” Ali said.

Minneapolis Democrats Sen. Omar Fateh and Rep. Hodan Hassan, who carried the bill in the Senate and House respectively, thanked the drivers’ group for their advocacy.

“It was everyday, average Minnesotans fighting corporate America,” Hassan said. “It was a hard fight. There were a lot of tears, but we won and the drivers won.”

Walz said he did not blame driver pay negotiations for the session’s failure to pass DFL priorities such as putting the Equal Rights Amendment on the ballot in 2026 or getting a bonding bill to fund infrastructure projects.

“We spent eight hours on a 200-word bill to get rid of junk fees,” Walz said. “We had four months to do this work.”