Uber and Lyft continue to operate in Minneapolis after driver salary regulations were adjusted

Uber and Lyft will continue to operate in Minneapolis after the Minnesota legislature approved a lower minimum wage for drivers over the weekend, according to reports from the Minnesota Reformer and StarTribune . If the bill passes, the new rates will take effect on January 1, 2025 and ensure drivers are paid at least 31 cents per minute and $1.28 per kilometer.

Last March, Uber and Lyft threatened to stop operating in Minneapolis after the city government passed a decree increasing fares to 51 cents per minute and $1.40 per kilometer when carrying passengers. Ride-hailing companies say the decree “faces many inadequacies” because the city government decided on prices before the state released a study on the salary needed for drivers to meet Minneapolis’ minimum wage.

The new salary proposed by Minnesota lawmakers would replace a decree passed by Minneapolis officials. In addition to establishing a statewide minimum wage, the bill would allow Uber and Lyft drivers to appeal their account suspensions, as well as claim on their vehicle insurance and compensation for injuries sustained while on the job.

“Through direct cooperation with all stakeholders, we have found enough common ground to balance driver pay increases with customer affordability and service maintenance,” Lyft spokesperson CJ Macklin said in an emailed statement to The Verge. Uber spokesman Josh Gold told The Verge that the company will continue to provide service in the state even though “upcoming price increases could impact both riders and drivers.”

The only remaining procedure is for Minnesota Governor Tim Walz to sign the bill. During a news conference Saturday, Walz said this would allow people in Minnesota to “continue to use these services as they see fit.” Last year, Governor Walz vetoed a bill that he said would make Minnesota one of the most expensive states for ride-hailing services.

In 2020, Uber and Lyft threatened to stop offering their services in California because of a new law classifying their drivers as employees. This isn’t the end of Uber and Lyft’s costly driver classification problem, either. The companies are facing a lawsuit in Massachusetts accusing the ride-hailing services of falsely classifying their drivers as independent contractors, while New Jersey is suing Lyft on similar grounds.