State negotiators have made progress toward keeping Uber and Lyft in the Twin Cities, but one friction point remains: whether Minneapolis should still be able to set its own driver pay rules.
Why it matters: Both rideshare companies have threatened to stop or limit service in the metro if Minneapolis' mandated driver pay ordinance takes effect July 1 , ramping up pressure on the Minnesota Legislature to intervene.
Yes, but: State intervention won't matter if Uber, Lyft, lawmakers, and drivers can't agree on whether Minnesota should override the city's driver pay increase — which they have not yet done.
State of play: Where to set minimum pay rates for rideshare drivers is "the big question remaining" in statewide negotiations, House Majority Leader Jamie Long (DFL-Minneapolis) told Axios.
- Sen. Omar Fateh (DFL-Minneapolis), said he's "optimistic" about reaching an agreement on pay, saying the parties are "closer than we are apart."
Friction point: Even if negotiators agree on a state-level pay rate, the thorny issue of whether that should "preempt" Minneapolis' ordinance looms as a possible deal-breaker.
- Long opposes preemption. "It's been a long-standing fight for the city" to have the power to pass its own "leading-edge" worker protection laws, he said.
- Uber spokesperson Josh Gold told Axios that sealing a deal will be tough without preemption. Lyft spokesman Eric Smith agreed preemption is an "important issue."
Gov. Tim Walz "would support a statewide standard … that allowed these essential companies to remain in the state," a spokesperson said in response to a question about whether he supports preemption.
What we're watching: "One possible outcome," Long said, would be for the Minneapolis City Council to adjust the ordinance to match a new statewide rate — which could avoid messy negotiations over preemption.
- He said council members are "important stakeholders" in the ongoing negotiations.
- While some members could be open to that, the ordinance's original authors have said they oppose "changing the rates to subminimum wage equivalents."
- Matching the city and state rates might not be enough for Uber. Gold said the company doesn't want to be subject to a city-by-city patchwork of regulations, not only on the base rates but also on issues like how surge fares are calculated and compliance is monitored.
By the numbers: Minneapolis' rule would require that drivers earn at least $1.40 per mile while operating within city limits.
- A state analysis said a rate of between 89 cents and $1.21 per mile would be enough to guarantee drivers earn the equivalent of a $15 minimum wage after expenses.
- Walz "wants any legislation to be based on the data that study provided," a spokesperson told Axios.
- Gold declined to share Uber's target rates, but Lyft spokesperson Eric Smith said the company is pushing for 89 cents per mile.
The intrigue: The rideshare companies are also looking for guarantees that Minnesota drivers will not be reclassified as employees , who enjoy more job protections and have the right to unionize.
- Some sources suggested it might be possible to assure the rideshare companies that drivers would remain "independent contractors" without explicit language in the bill.
- Lyft disagreed: "The state can offer no assurances except explicit language," Smith said.
What's next: The Legislature must adjourn by May 20, potentially giving negotiators less than a month to finalize a deal.
Go deeper: What Minneapolis can learn from Uber and Lyft's year-long exit in Austin, Texas
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