Gov. Walz vetoes bill establishing minimum wage for Uber and Lyft drivers: 'This is not the right bill to achieve these goals'

Minnesota Governor Tim Walz has issued his first-ever veto, rejecting a bill that aimed to set minimum pay rates for Uber and Lyft drivers and provide them with increased job security. 

The veto came after Uber threatened to limit its services to the Twin Cities metropolitan area if the bill became law. In response, Walz announced the formation of a working group to develop recommendations for future legislation. While drivers and labor advocates expressed disappointment, Uber and Lyft celebrated the veto, claiming that the bill would have made rides unaffordable for most customers.

“Rideshare drivers deserve fair wages and safe working conditions. I am committed to finding solutions that balance the interests of all parties, including drivers and riders,” Walz said in a statement, according to Minnesota Reformer. “This is not the right bill to achieve these goals. I have spent my career fighting for workers, and I will continue to work with drivers, riders, and rideshare companies to address the concerns that this bill sought to address.” 

In a statement released by the governor's office, it was revealed that Walz had signed an executive order to convene a working group. This group, consisting of drivers, riders, and representatives from transportation network companies, will collaborate to develop recommendations for future legislation. The governor emphasized his commitment to finding solutions that balance the interests of all parties involved, including drivers and riders.

The legislative session in Minnesota witnessed significant debates and actions surrounding workers' rights, with businesses facing numerous setbacks. However, Walz's veto of the Uber and Lyft regulations and the failure of a bill backed by the nurses' union to increase nurse staffing levels after the Mayo Clinic threatened to withdraw investments stood out as notable exceptions. 

“Following several months of unanswered requests to work with legislators on comprehensive legislation that provides flexibility and benefits to drivers without compromising service for riders, we are left with a bill that will make it impossible to continue serving most areas of the state," Freddi Goldstein, Uber spokeswoman said in a release prior to the bill being vetoed, WDIO reported. "If the bill is signed into law, beginning August 1, Uber will stop operating our rides service outside of the Minneapolis-St. Paul metro area. In the metro area, we will only offer premium products to match the premium prices required by the bill.”  

Both Uber and Lyft celebrated the veto, expressing concerns that the legislation had been rushed and would have resulted in unaffordable rides for the majority of their customers. The companies emphasized the need for fair pay and additional protections but urged lawmakers to consider a different approach that would preserve affordability and safety. The bill regulating Uber and Lyft had been passed by the Legislature after weeks of organizing efforts and lobbying by hundreds of drivers. However, in the final days of the session, Senator Omar Fateh played a pivotal role in reviving the bill, potentially stalling other legislation in the closely divided Senate. 

Fateh voiced his disappointment with the veto on social media, highlighting the lack of communication between the administration and the drivers. According to Uber, if the regulations were implemented, ride prices would have increased by at least 50%, resulting in a 30% decrease in demand. The company argued that the proposed rates in Minnesota would have made drivers the highest paid per mile in the country. The bill aimed to establish minimum pay rates for drivers, varying based on the location. In the Twin Cities metropolitan area, transportation network companies would have been required to pay drivers a $5 minimum fee, along with $1.45 per mile and 34 cents per minute. Drivers in Greater Minnesota would have been entitled to $1.25 per mile and 34 cents per minute. These rates would have been adjusted for inflation over time.

Additionally, the bill included provisions to protect drivers against wrongful termination, or "deactivation." Drivers often face sudden deactivation from the app, leaving them without recourse or the ability to maintain their car payments. The legislation sought to impose clear written rules for deactivation or sanctions, offering drivers the right to appeal such decisions. 

Uber and Lyft opposed the bill's requirements, arguing that they would be forced to seek testimony from victims of assault or other serious misconduct to justify deactivating problematic drivers. The companies also objected to the provision allowing former drivers to challenge deactivations dating back to 2021. While the veto came as a disappointment to drivers and labor advocates who had championed the bill, Governor Walz's decision to convene a working group presents an opportunity for further dialogue and the development of more comprehensive legislation in the future. The fate of minimum wage regulations and enhanced job security for Uber and Lyft drivers in Minnesota remains uncertain as stakeholders continue to explore alternative paths forward.