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For over a year, our offices have been working to close a loophole in our city’s $15 municipal minimum wage by including thousands of mostly Black and immigrant workers who drive for Uber and Lyft.
Drivers organized to ask that Council use our legislative authority to extend the protections of the $15 minimum wage to them. Drivers told us that their wages are extremely low and unreliable, their vehicle and fuel costs are high, and their families struggle to make ends meet. This is an unacceptable reality that Minneapolis workers face because multi-billion dollar corporations don’t want to play by the same rules as our local small business owners do.
No worker should be exempt from the city’s $15 minimum wage. That’s why we worked with city staff and national experts for the better part of last year to craft a policy that reflects national standards for driver compensation and guarantee drivers are taking home at least $15/hour: $1.40 per mile and $0.51 per minute. Council passed the policy, but Mayor Frey vetoed it, instead announcing he had made a non-binding deal with Uber. There is no evidence that this deal was ever implemented, but drivers continued to show us receipts documenting low compensation and telling us that regulating rideshare companies like Uber and Lyft to pay the city’s $15/hour minimum wage would improve their lives.
Throughout the last year of discussion, Council has expressed broad support for a policy that gets drivers $15 minimum wage equivalents. We wanted to ensure absolute clarity for all policymakers and the public about what compensation proposal equates to the city’s minimum wage for drivers. So we asked city staff to do a comparative analysis of three compensation proposals: the original proposal (Model A), the Mayor’s proposal (Model B), and a flat rate proposal that came from conversations with Council Members (Model C).
The findings in the report are clear: Given the available data, Model A best equates to a $15/hour wage for drivers. The Mayor’s proposal, Model B, falls far short of the minimum wage because it fails to account for vehicle and fuel costs, which is out of alignment of national standards. The examples in the report reveal that drivers earn over 30% less per ride in Model B or Model C than in Model A.
It’s time to close the loopholes to the city’s $15 minimum wage. Uber and Lyft will claim that increasing drivers compensation will force them to raise the prices of rides, but these multi-billion dollar companies have the profit margins to both pay drivers minimum wages and keep rides affordable. We must recognize these fear-mongering tactics for what they are, and we must not allow them to stop us from passing a $15 minimum wage equivalent for drivers. The Mayor’s office is likely to continue to promote the preferred model by Uber and Lyft, which is Model B. Given the available data, Model B will essentially codify sub-minimum wages for drivers who work for rideshare companies like Uber and Lyft.
We look forward to passing Model A, the only compensation policy that means drivers take home $15 minimum wage equivalents, just like every other worker in our city. Council Members also expressed a desire for more data to continue making informed decisions. We will be advancing additional policy mandating that rideshare companies disclose their data to the city along with workers’ rights and safety protections for riders and drivers. Both drivers and riders in our city deserve protections and we look forward to delivering on both.
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