Minnesota lawmakers passed a bill Sunday that aims to increase the pay rate for rideshare drivers and Lyft.
Gov. Tim Walz and other Democratic leaders announced a deal on a bill that would raise the pay rate for drivers by 20%, meaning drivers will now make $1.28 per mile and $0.31 per minute, according to Fox 9.
The agreement comes ahead of an ordinance from the Minneapolis City Council scheduled to take effect July 1. The ordinance, which would raise the minimum wage for drivers to $1.40 per mile and 51 cents per minute, led Uber and Lyft to threaten to leave Minneapolis.
The two rideshare companies said the deal reached Sunday represents an acceptable compromise that would allow them to continue operating across Minnesota.
UBER, LYFT TO LEAVE MINNEAPOLIS DUE TO MINIMUM WAGE LAW
"We applaud the tens of thousands of riders and drivers who sent close to 100,000 emails to legislators - your voices were heard," Uber Senior Director of Public Policy and Communications Josh Gold said in a statement to Fox 9. "While the coming price increases may hurt riders and drivers alike, we will be able to continue to operate across the State under the compromise brokered by the Governor."
Uber also said the legislation was based on a "flawed study" and that it does not include other costs, including per trip fee, paid sick time or unemployment insurance.
Lyft responded to the legislation by saying the company found enough common ground to prevent it from exiting the state.
"We have long supported a minimum earnings standard and increasing driver pay in smart, deliberate ways, which is why earlier this year we announced a new commitment where drivers will always make at least 70% of the weekly rider fares after external fees," a spokesperson for Lyft said in a statement to Fox 9.
UBER, LYFT THREATEN TO LEAVE MINNEAPOLIS OVER CITY ORDINANCE
"This legislation builds on those efforts and marks an important compromise that allows Minnesota rideshare drivers to keep earning with Lyft," the statement continued. "Through direct engagement with all stakeholders, we have found enough common ground to balance a new pay increase for drivers with what riders can afford to pay and preserve the service. We look forward to continuing to serve both riders and drivers across the state for the foreseeable future."
The lead sponsor of the bill, Democrat Sen. Omar Fateh, said the measure to raise driver pay was a long time coming.
"Oh, man. It's been two long years," he said at the podium announcing the agreement on Sunday.
Republican lawmakers, however, criticized Democrats for largely leaving them out of the bill's legislative process.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
"The reality is, this is a day where we should've been doing work, but we were not," Senate Minority Leader Mark Johnson said. "We were trying to figure out what was happening while we were being kept in the dark the entire time."
Walz highlighted the importance of the agreement and praised lawmakers for not wavering throughout the process to move the legislation across the finish line.
"This is hard," Walz said. "No one else has been able to do this in the country, and I think what you heard here, they set a standard in this across the country, making sure that folks are able to get their rides when they need them, but that the drivers are being paid accordingly to make that happen."
