Minnesota government officials have struck a deal with rideshare companies Uber and Lyft to set minimum wage standards for drivers, lawmakers announced Saturday night.
The agreement is the culmination of nearly a year of back and forth between Democratic state officials and the two companies, who threatened to withdraw their businesses from Minnesota over a proposed Minneapolis ordinance that would grant rideshare drivers increased worker protections.
The ordinance, initially adopted in August 2023, was part of a larger effort to grant more comprehensive benefits to contract workers, who take freelance work at digital platforms like DoorDash, Instacart, Uber and Lyft. It mandated drivers be paid at least $1.40 per mile and $0.51 per minute.
The rule was delayed after Lyft and Uber warned they would leave Minneapolis. State lawmakers have been focused on compromising with the companies before a July 1 deadline.
Under the new agreement, the statewide minimum wage rate for rideshare drivers will be $1.28 per mile and $0.31 per minute. The rule will override the higher rate the Minneapolis City Council had initially proposed.
“When you take it as a blended rate, that results in a 20% increase in pay for drivers in the state of Minnesota,” the state’s Democratic House Majority Leader Jamie Long told reporters Saturday night.
The bill also includes the “strongest insurance provision for drivers in the entire country,” Long added.
“It was a hard-fought compromise,” said Democratic Senate Majority Leader Erin Murphy, acknowledging negotiations over pay had to toe the line between addressing the needs of employees and the need of Minnesotans who rely on rideshare services for transportation.
“We applaud the tens of thousands of riders & drivers who sent close to 100,000 emails to legislators — your voices were heard. 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’s policy director Josh Gold said in a statement.
Lyft has not responded to CNN’s request for comment.
