LogFAQs > #979242324

It's okay, I didn't want to retire anyway. Who needs an IRA?

https://www.startribune.com/veto-proof-minneapolis-city-council-approves-rideshare-driver-pay-hike-frey-vows-veto/600349186/

Dismissing Uber and Lyft's vows to leave town and declaring a victory for a sector of underpaid workers, a veto-proof majority of the Minneapolis City Council Thursday approved a pay increase for rideshare drivers that Mayor Jacob Frey pledged to veto.

The vote was 9-4, enough to override the veto if that vote were to hold.

If the council overrides the veto later this month, both ride-hailing companies said Thursday they will cease operations in the city and perhaps the entire state on May 1, the day the pay increase will take effect. (The council changed the effective date to May 1 from April 1 Thursday.)

Uber and Lyft are the only two rideshare operations, also known as "transportation network companies," licensed to operate in Minneapolis, although several entities have indicated an interest in starting up in the city.

Supporters, including organized groups of drivers and some labor advocates, say the set of minimum pay scales and other protections, is the best way to ensure drivers earn the equivalent of the city's $15.57 hourly minimum wage. While driving for Uber or Lyft is often seen as a side gig, it has become the sole source of income for many drivers.

"If employers leave because they are paying sub-minimum wages and companies step in who pay minimum wages, I believe that's a win for our city," Council Member Jason Chavez said in supporting the ordinance amid the threats from companies.

Uber and Lyft, however, say the minimums are too high to make doing business here worthwhile. In order to make their margins, the companies say they would be forced to nearly double fares, resulting in so few riders that the business model would collapse.

The vote came on the eve of a state report that could explain which rates would equate to what actual earnings for drivers a tricky figure to nail down in the dynamic pricing universe of ridesharing. An attempt to delay the city council vote to await that report fell short Thursday.

In the past two days, Frey pleaded for the council to await the report and soften its demands to a level that he says Uber and Lyft would accept but still effectively nearly double the rates drivers earn. That didn't happen. The measure the council approved Thursday is similar to one the mayor vetoed last year.

Opponents of the plan include business leaders, bar and restaurant associations. Also concerned are some in the disability community, who note that many people unable to drive rely on rideshare companies, often with public aid vouchers, to travel to medical appointments, work, or to see friends and family.

In the past week, the companies have upped their pressure on the council to reject the higher-paying package. Uber took out ads on the home page of the Star Tribune and on local radio. Lyft sent letters to council members, appealing to their sense of economic justice by offering figures showing that the typical Minneapolis rider is working class.

On Wednesday evening, Lyft sent council members and the media an online petition, signed by some more than 300 Lyft drivers, opposing the plan. With thousands of drivers in the metro, it's unknown how the popularity of the plan approved by the council compares to Frey's less-ambitious counter-proposal.

During a three-month period in the summer of 2023, some 7,000 Uber drivers provided nearly 300,000 rides in the metro area, according to figures the company supplied.

Drivers react

Following the vote, drivers at City Hall cheered the council's decision.
"This is great! This is historic! Thank you council members," driver Farhan Badel shouted moments after the vote.

Matthew McGlory who has driven over 10,000 rides for Lyft and nearly as many for Uber, came out for the vote Thursday morning.

Even on a solid ride like the one he drove Wednesday morning before showing up to city council, McGlory earned less than half of the price the app shows to riders, with tip included.
He's worried the impending state study that nearly diverted the vote will include tips as income, masking what drivers actually make.

"What's going to be in this report? Why is it just coming out tomorrow," McGlory asked.

The amount of business travel, the Delta airport hub and the amount of large national events based in the city make him doubtful that the app-based ride services would truly leave Minneapolis.

"I think that is a poker bluff," McGlory said.

Seeing big companies make 60% percent of rides when the drivers are the ones providing the service just doesn't make sense, said Marianna Brown, who's driven for the apps for 5 years in New York and the 18 months she's lived in Minneapolis.

"Why should we let the big corporations make all the money when we as little people make nothing," Brown said. "When they show a billion dollars per year as their as their as their profits."

Brown showed screenshots on her phone of particularly lowball offers from the app one rider was offered $130 for a 4 hour and 45 minute drive, she said.

What drivers get

The plan approved Thursday guarantees a floor of $1.40 per mile and 51 cents per minute.

Frey had been pushing a plan that set a minimum payment of $1.20 per mile and 35 cents per minute.

The plan approved by the council also includes some of the following provisions:

• $5 minimum payment for any ride
• Annual increases in line with the city's minimum wage rules
• If a ride is canceled while the driver is en route, the driver gets 80% of the fare
• Restrictions on how money can be deducted from drivers' wages, and a prohibition for cutting into the drivers tips
• Protections from retaliation

How they voted

Voting in favor were Council President Elliott Payne, Council Vice President Aisha Chughtai, and Council Members Robin Wonsley, Jeremiah Ellison, Jamal Osman, Katie Cashman, Andrea Jenkins, Jason Chavez and Aurin Chowdhury.

Voting against were Council Members Michael Rainville, LaTrisha Vetaw, Emily Koski and Linea Palmisano.

State context

The state study is in the context of a push to raised the pay and working standards of rideshare drivers statewide.

The Legislator passed a plan last year, but Gov. Tim Walz vetoed it amid opposition from Uber and Lyft.

Walz established a task force, including drivers and company representatives, to look into the matter and recommend a plan. They finished their work without specific rate recommendations but before a study by the state Department of Labor and Industry had concluded. It's that study that could come out as soon as tomorrow, the first in Minnesota to examine aggregate data from the rideshare companies.

Frey blasted the council for not waiting for that study.

"The statewide report is literally going to be released tomorrow," Frey said. "It's irresponsible to pass policy today when we'll have the data tomorrow.

"Supporters of the council's plan on Thursday noted that they could change the rates before they become effective May 1.