Minneapolis vs. Uber: Frey vetoes pay-raise ordinance, reaches compromise with Uber

MINNEAPOLIS (FOX 9) - Minneapolis Mayor Jacob Frey says he will veto an ordinance that would bring a pay boost for drivers who work for ride-hailing apps like Uber and Lyft.

Both companies had threatened to pull out of Minneapolis if the ordinance had been signed into law. At the same time, Frey is offering a compromise for drivers.

Frey says he has reached an agreement with Uber to guarantee drivers are paid at least minimum wage for trips in the city. Frey says Uber is also guaranteeing drivers will make at least $5 per trip in the metro area.

A release from Frey's office says he will work over the coming weeks on a new ordinance.

The pay boost ordinance for drivers was passed last week by the Minneapolis City Council on a 7-5 vote. The ordinance would provide a minimum pay rate of $1.40 per mile and 51 cents per minute. That would have moved Minneapolis into some of the highest-paid cities for Uber and Lyft drivers, past New York ($1.31 per mile/56 cents per minute) and San Francisco (93 cents/40 cents) but behind Seattle ($1.50/64 cents).

Lyft threatened to stop covering Minneapolis by January 1 if the law was passed. A similar measure was considered in the state legislature earlier this year. At that time, Uber threatened to pull out of Minnesota.

Reaction to veto

In a statement, Minneapolis Councilmember Robin Wonsley, who wrote the pay boost ordinance, blasted Frey's veto.

"This veto is an inexcusable betrayal of Minneapolis workers," a statement from Wonsley read. "The ordinance was developed over eight months of consultation with drivers, city staff, and national experts. As a Council Member, Jacob Frey voted to approve a $15 minimum wage, but evidently he is ready to abandon any commitment to living wages or workers’ rights under the pressure of lobbying by multibillion-dollar out-of-state corporations. This fight is not over. The drivers who have been organizing for this will continue to show up, because their livelihoods are on the line. And as long as I’m in City Hall, I’ll support their work and the rights and dignity of every worker in the city."

In its own statement, Uber said it was still working to find a statewide deal that would raise pay for drivers "without sacrificing ridership."

The Uber statement continues: "In that effort, we look forward to continued work on the Governor’s Task Force. In the meantime, for engaged time in Minneapolis (time spent en route to a passenger and while a passenger is in the vehicle), Uber will guarantee all drivers will earn at least the equivalent of the Minneapolis minimum wage, with no trip fare resulting in less than $5. We appreciate Mayor Frey’s thoughtful approach and the opportunity to continue working together to get this right and hope the Minnesota legislature quickly passes a statewide compromise in February."

Lyft also sent a statement, with a spokesperson telling FOX 9 the company was no longer planning to pull out of Minneapolis.

Drivers respond

On Tuesday, Uber drivers expressed that this week's developments didn't meet their expectations.

"The minimum pay is not enough," said Tresor.

Steve Ball shared mixed feelings. "I mean I like it, but then again, it’s going to hurt. The other people too. The rides are going to be more expensive."

It remains uncertain how many drivers in Minneapolis were earning below the minimum wage before Tuesday. According to Uber, between April and August, the median driver earnings during a ride were over $32 per hour excluding tips. Meanwhile, Lyft reported that in the last quarter, their median earning was $37 per hour, including tips.