Minnesota Governor Tim Walz on Thursday vetoed a bill that would guarantee 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,” Walz, a Democrat, wrote in a letter to the president. of the Minnesota House of Representatives. But he said the legislation, which passed the state legislature last week, “is not the right law to achieve those goals.”
The bill was seen as a significant victory for labor advocates, who are fighting for greater benefits for show drivers across the country. Uber and Lyft treat their drivers as independent contractors rather than employees, meaning drivers are responsible for their own expenses and do not receive healthcare or other benefits. The companies say their business model allows drivers to retain the flexibility they want.
The legislation would require Uber and Lyft to pay their drivers at least $1.45 per mile they drive with a passenger, or $1.34 per mile outside Minneapolis-St. Paul, as well as $0.34 per minute. It would also have established a review process allowing drivers to protest in cases where they have been turned off platforms.
Walz supported Uber and Lyft’s arguments, which said the minimum wage was too high for an area like Minnesota and would require them to drastically scale back their ridesharing business in the state as costs rose for riders.
Earlier on Thursday, Uber said it would pull out of Minnesota in early August if the project passes, leaving only its premium service in the state’s largest metro area.
“This bill could make Minnesota one of the most expensive states in the country for rideshare, potentially matching the cost of travel in New York and Seattle — cities with dramatically higher costs of living than Minnesota,” Walz said. wrote in his letter.
In addition to the veto — his first — Walz also issued an executive order establishing a commission to study Minnesota’s ridesharing business and recommend policy changes to ensure drivers receive fair compensation.
Uber applauded the news and said 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 the company has advanced in others. States.
“We welcome the opportunity to get this right and look forward to the legislature quickly passing a deal in February,” said Freddi Goldstein, a spokesperson for Uber.
CJ Macklin, a spokesperson for Lyft, added that “legislators must pass fair wages and other protections, but this must be done in a way that does not compromise the accessibility and safety of those who rely on the service.”
State Senator Omar Fateh, author of the bill, criticized Walz’s decision on Twitter.
“Today, we saw the power corporations hold our government,” he wrote. “The fight is not over, and I promise I will not give up.”