Minnesota Governor Tim Walz has vetoed legislation that would have granted job security and higher pay to Lyft and Uber drivers. The legislation, championed by Democratic Senator Omar Fateh, would have required drivers to be paid a minimum of $5 per ride, or at least $1.45 per mile and 34 cents per minute in the metropolitan area.
According to Walz, the proposal was “not the right bill to achieve these goals,” but his decision was followed by an executive order commissioning a study into working conditions for ride-hail drivers and how potential changes could impact costs and access for riders. The order sets up a committee to make recommendations by 1 January for future legislation to ensure drivers receive fair compensation.
Supporters of the legislation argued it would have raised wages and conditions for drivers who typically do not receive minimum wage protections due to the independent contractor status with ride-hail companies. However, Lyft and Uber classify their drivers as independent workers, a classification that entitles them to few benefits and means they are responsible for their own expenses.
Uber warned that if the bill passed it would be forced to suspend service in greater Minnesota and only offer premium ride services in the Twin Cities metro area. Lyft had echoed Uber’s sentiments and claimed the legislation would have made it harder to serve many suburban and rural areas across Minnesota.
The ride-hail industry has been hit hard in Minnesota due to the ongoing pandemic, with ridership declining sharply since spring 2020. Ride-hail drivers have also reported struggling amid soaring fuel and vehicle costs and lower compensation rates.
Walz’s decision may not be final as advocates for legislation to increase ride-hail driver pay are contemplating taking the issue to voters in a ballot measure in November 2022. State labor unions and political leaders continue to support such legislation in Minnesota, which despite having the highest concentration of union membership, has seen several pro-labor reforms blocked.
Overall, the executive order suggests the Minnesota government remains committed to ensuring ride-hail drivers receive fair compensation and better working conditions, while balancing costs and access for rider.
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