Minnesota Gov. Tim Walz vetoed a bill Thursday that would have guaranteed a minimum wage and other protections for Uber and Lyft drivers.
“Rideshare 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 passengers alike,” wrote Mr. Walz, a Democrat. , in a letter to the Speaker of the Minnesota House of Representatives. But he said the legislation, which passed the state legislature last week, “is not the right bill to accomplish these goals.”
The bill had been seen as a significant victory for labor advocates, who have been fighting for greater benefits for concert conductors across the country. Uber and Lyft treat their drivers as independent contractors rather than employees, which means 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 driven with a passenger, or $1.34 per mile outside of Minneapolis-St. Paul, as well as $0.34 per minute. It would also have established a review process that would allow drivers to protest in cases where they were deactivated from the platforms.
Walz sided with the arguments of Uber and Lyft, which said the minimum wage was too high for a region like Minnesota and would force them to slash their rideshare businesses in the state as costs to riders rose. .
Earlier Thursday, Uber said it would pull out of Minnesota in early August if the bill passes, leaving only its premium service in the state’s largest metropolitan region.
“This bill could make Minnesota one of the most expensive states in the country for rideshares, which could put us on par with the cost of rides in New York City and Seattle, cities with dramatically lower costs of living. higher than Minnesota,” Walz said. wrote in his letter.
In addition to the veto, the former, Mr. Walz also issued an executive order establishing a commission to study the rideshare business in Minnesota and recommend policy changes to ensure drivers are fairly compensated.
Uber applauded the news, saying it would support a different bill that would offer a slightly lower minimum wage and ensure drivers are classified as independent contractors rather than employees in Minnesota, a long-standing goal of the company that has advanced in other states.
“We welcome the opportunity to get this right and hope the legislature quickly passes a compromise in February,” said Freddi Goldstein, a spokeswoman for Uber.
CJ Macklin, a Lyft spokesperson, added that “lawmakers should pass fair pay and other protections, but it must be done in a way that doesn’t jeopardize affordability and safety for those who depend on the service.”
State Senator Omar Fateh, author of the bill, criticized Mr. Walz’s decision on Twitter.
“Today, we saw the electric corporations control our government,” he wrote. “The fight is not over and I promise you I will not back down.”