MINNEAPOLIS — Rideshare fares will cost you a bit more after a new law setting minimum pay levels for transportation network drivers kicked in on Dec. 1.
The law, passed in May during the 2024 legislative session, pushes minimum pay for drivers who work for Uber, Lyft and similar transportation networks to $1.28 per minute and 31 cents per mile. There is a minimum ride charge of $5. Along with the new minimum rates, the law is designed to provide greater transparency into what customers are charged, increase insurance coverage, and build new partnerships with community organizations to assist and support drivers.
At the time the law was passed, Uber estimated that passengers would pay 25% more for a ride under the legislation.
It took a year of task force meetings organized by the Minnesota Department of Labor and Industry (DLI) and input from drivers, rideshare users, community and legislative leaders to hammer out the new law, with both Uber and Lyft threatening to pull out of the state if even higher pay rates mandated by the Minneapolis City Council would have taken hold.
"[Transportation Network Company] drivers and stakeholders showed up to advocate and the result was new legislation that increased driver benefits and protections," said Nicole Blissenbach, DLI commissioner. "Our agency is now working to educate drivers and work with the TNCs, so the law works as intended."
Among the requirements and features of the new law:
- To ensure drivers earn the minimum compensation rate, every 14 days, TNCs will review individual trip and earnings records. If a driver did not meet the minimum rate of pay over that time period, the TNC will provide a supplemental payment to make up the difference. All tips belong to the driver and are not counted toward the minimum compensation rate.
- TNCs will pay drivers an additional 91 cents a minute if they drive a wheelchair-accessible vehicle to encourage more accessible rides.
- Companies will provide drivers with a trip receipt within 24 hours of a completed trip, and weekly summaries that include the driver's total earnings before tips, total trip time, miles, total fares and fees paid by passengers, and the driver's total time on the TNC's app.
The Minnesota Department of Labor and Industry retains enforcement authority to ensure minimum compensation rates and pay transparency provisions aren't met.
Additional information on the rideshare compensation law is available on the DLI website.
A comprehensive study of transportation network drivers by the DLI in 2023 determined that most rideshare drivers are persons of color, and more than half are immigrants. That study recommended 89 cents per mile and 49 cents per minute would be roughly equivalent to the state minimum wage plus some of the driver's work-related expenses.
But the Minneapolis City Council, acting without state input, passed an ordinance that would've guaranteed drivers $1.41 per mile plus 51 cents per minute and other benefits. Uber and Lyft both issued warnings that they would leave Minneapolis - and likely the state - if that ordinance went into effect.
The council eventually rescinded that ordinance in early May after striking a compromise with state lawmakers on increases to transportation network company driver compensation.