June 6, 2023

Minnesota Gov. Tim Walz on Thursday vetoed a bill that would have guaranteed a minimum wage and other protections for Uber and Lyft drivers.

“Ride-share drivers deserve safe working conditions and fair wages, and I am committed to finding solutions to these issues that balance the interests of all Minnesotans, drivers and riders,” Mr. Walz, a Democrat, wrote in a letter to the Speaker of the Minnesota House of Representatives. But he said the legislation, passed by the state legislature last week, “is not the right bill to achieve these goals.”

The bill was seen as a major victory for labor advocates, who have been fighting for more benefits for handyman drivers across the country. Uber and Lyft treat their drivers as independent contractors rather than employees, meaning the drivers are responsible for their own expenses and do not receive health care or other benefits. The companies say their business model allows drivers to maintain the flexibility they want.

The legislation would have required Uber and Lyft to pay their drivers at least $1.45 per mile they drive with a passenger, or $1.34 per mile outside the Minneapolis-St. Paul area, as well as $0.34 per minute. It also allegedly set up a review process that allows drivers to protest instances where they have been deactivated from the platforms.

Mr. Walz backed arguments from Uber and Lyft, who said the minimum wage was too high for a region like Minnesota and would require them to drastically curtail their ride-sharing operations in the state as the cost to riders rises. rose.

Earlier on Thursday, Uber said it would pull out of Minnesota in early August if the law passed, leaving only premium service in the state’s largest metropolitan region.

“This bill could make Minnesota one of the most expensive states in the nation for ride-sharing, potentially putting us on par with the cost of rides in New York City and Seattle — cities with a dramatically higher cost of living than Minnesota. ,” mr. Walz wrote in his letter.

Aside from the veto — his first — Mr. Walz also issued an executive order establishing a commission to study Minnesota’s ride-share business and recommend policy changes to ensure drivers receive fair compensation.

Uber applauded the news and said it would support another bill that would offer a slightly lower minimum wage and ensure drivers were classified as independent contractors rather than employees in Minnesota, a long-standing goal of the company that it is in. presented by other states.

“We appreciate the opportunity to get this right and hope that the legislature quickly approves a compromise in February,” said Freddi Goldstein, a spokeswoman for Uber.

CJ Macklin, a spokesperson for Lyft, added that “legislators must provide fair pay and other protections, but do so in a way that does not compromise the affordability and safety of those who rely on the service.”

State Senator Omar Fateh, an author of the bill, criticized Mr Walz’s decision on Twitter.

“Today we saw the energy companies hold our government,” he wrote. “The fight isn’t over yet, and I promise I won’t back down.”