By: Jocelyn Knorr

You’ve probably seen the social media buzz—Uber and Lyft are finally being held to Minnesota’s minimum wage laws. But how did we get here, and why weren’t they held to these laws in the first place? To find the answer, we have to go back to 2013, when the rideshare companies began operating unregulated in the Twin Cities. Minneapolis scrambled to let them operate legally, drafting amendments to the city’s taxi laws to allow them in; at the time pay was less of a priority than regulation of who could become a driver, as the lack of regulation made it attractive to people who would otherwise find it difficult to find jobs, such as those convicted of assault or other violent crimes.

Things moved fairly smoothly for a while—Uber and Lyft became the default way to get around the city without your own automobile, especially after they were allowed to pick people up at MSP airport.

Uber became the biggest startup in the world in 2019, and even COVID couldn’t stop it. When the pandemic impacted employment, more and more people turned to rideshares as a way to make money; they became an important source of income for students, and disabled people who couldn’t work a full day.

Immigrants also use rideshares as a source of income; according to the Minnesota Department of Labor and Industry, 61% of rideshare drivers in Minnesota are foreign-born. Rideshares allow immigrant workers to find work, skipping over the preconceived notions of hiring managers.

However, this is when issues began to arise—or rather, were noticed. Things like sales tax, meant to be borne by riders, began to be skimmed via “administrative fees.” Uber claimed that there was an option for drivers to charge riders for tolls and other fees, but no option for that ever seemed to have existed in the Uber app. While Uber and Lyft claimed that their drivers made above minimum wage, the truth is that it was actually well under.

At the same time, international strikes were staged by drivers, hoping to bring awareness of what companies were doing to them. A new group of Minnesota drivers, the Minnesota Uber/Lyft Drivers Association, spoke to the state’s Democrats in 2022. They pledged to strike a deal with rideshare companies, and began pushing a bill to set a minimum pay floor.

New York state began an inquiry about a year later; they found that rideshare companies had systematically shorted their drivers out of a collective $328 million via the methods outlined. They instituted a pay floor for drivers in accordance with New York minimum wage—Minneapolis did something similar, ensuring drivers a rate of $1.41 per mile.

This enraged Uber and Lyft, who threatened to leave the city of Minneapolis. They did something similar in Austin in 2016, over fingerprint background checks for drivers—the city council had to revoke the ordinance entirely to make the rideshare companies come back.

Meanwhile, in the Minnesota Senate, Omar Fateh (D), who represents District 62, spent most of 2023 pushing for a statewide minimum pay rate. The Democratic party only has a one-vote majority, and Senator Fateh (D) held up proceedings until the bill was passed—Democrats would be forced to either pass the pay minimum, or work with Republicans to get anything done.

The minimum pay bill passed just under the wire on May 18, 2024. It guarantees $1.28 per mile in accordance with both Uber and Lyft and U/LDA; under Minnesota laws, drivers will now make $15.57 per hour. The rideshare companies have since agreed not to pull out.

However, all is not completely sunny. There’s something to be said about the House and Senate going over Minneapolis’ head and acquiescing to large corporations. To quote Minneapolis City Council member Aisha Chughtai (D), “Preemption is bad. Period. Any and all attempts to undermine local control are bad. It’s a Republican and corporate tactic used around the country. Watching our [Governor Walz] cave to multibillion dollar corporations in insisting on preempting Minneapolis is gross.”

The law, too, doesn’t go into effect until January 1, 2025. How many people will be unable to keep their head above water until then? Will Uber and Lyft manage to alter the terms? We just can’t know. For now, we ought to keep these people in mind for the next year; both the rideshare drivers, whose income is still not safe, and the legislators that made this happen—especially in November, when many of them are up for re-election.