Gov. Walz signs Minnesota rideshare bill into law

MINNEAPOLIS (FOX 9) - Minnesota Gov. Tim Walz on Tuesday signed legislation that keeps ride-hailing services like Uber and Lyft in Minnesota while raising driver pay. 

The Minnesota Legislature, on the final day of the session, passed a bill that requires ride-hailing companies to pay drivers a minimum of $1.28 per mile and $0.31 per minute while transporting riders anywhere in Minnesota, starting on Dec. 1, 2024. This means a ride that lasts 10 miles and 15 minutes would result in the driver being paid a minimum of $17.45, not accounting for expenses such as gas or wear and tear on the vehicle.

The new state law overrode the Minneapolis ordinance that initially caused Uber and Lyft to threaten to leave.

How'd we get here?

In March, the Minneapolis City Council approved an ordinance, overriding a veto by Mayor Frey, requiring ride-hailing companies to pay drivers $1.40 per mile and 51 cents per minute. In response, Uber and Lyft threatened to end service in Minneapolis when the ordinance went into effect on May 1.

The companies later countered, backing a rate proposed in a state study on ride-hailing driver wages: 89 cents per mile and 49 cents per minute. It should be noted that the state study found that ride-hailing app drivers made below minimum wage when accounting for expenses – though the apps have been critical of the accuracy of said study.

The Minneapolis City Council eventually delayed the implementation of its ordinance until July 1, to allow more time to tweak the ordinance. Some council members also hoped the delay would give new ride-hailing app startups time to get up and running.

At the same time, state lawmakers were working on a compromise bill that would set a rate for drivers statewide. On May 6, lawmakers announced a "compromise" that would pay drivers $1.27 per mile and 49 cents per minute. Again, Uber and Lyft balked, saying they would leave the entire state if those rates went into effect. Though some legislative leaders felt this was a bluff by the companies to continue negotiations, pointing to the fact that Uber and Lyft already operate in other jurisdictions with the same or higher rates for drivers.

After further negotiations over the weekend, lawmakers reached a new deal: $1.28 per mile but only 31 cents per minute. Uber and Lyft both issued statements on the final day of the session, saying the agreed-upon rate would be enough to keep the companies operating in Minnesota.

The Associated Press contributed to this report.