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FILE - A passerby walks past a sign offering directions to an Uber and Lyft ride pickup location at an airport, Feb. 9, 2021. (AP Photo/Steven Senne, File)
ST. PAUL, Minn. (Minnesota Reformer) โ A new minimum wage for Uber and Lyft drivers in Minnesota takes effect on Sunday, the result of a hard-fought, two-year campaign to raise driversโ wages, insurance coverage and protections from unfair discipline.
Drivers for transportation network companies will earn at least $1.28 per mile and 31 cents per minute on average for time spent driving passengers. With that rate, the typical driver in the Twin Cities can expect to earn at least $34.58 per hour before they pay for gas and other expenses โ a 14% increase over 2022 pay โ according to an analysis by the Service Employees International Union based on a state study of driver earnings. The law entitles drivers to at least $5 per trip, 80% of any cancellation fee and additional pay if they have a wheelchair accessible vehicle.
Customers in the Twin Cities metro area can expect to see about a 25% increase in pricing at first, according to an Uber spokeswoman.
Loren Balazs, a full-time Uber and Lyft driver, said heโs worried the higher prices might lead to a decrease in demand but is overall optimistic the law will increase pay, especially on longer rides.
The new law also gives drivers the right to appeal being fired โ or โdeactivatedโ โ on a quick timeline; expands insurance requirements for companies (which will take effect Jan. 1); and requires companies to contract with a nonprofit organization to provide โculturally competent driver representation services, outreach and educationโ to the many East African and other immigrant drivers on the platform.
Uber and Lyft did not say which nonprofit theyโve decided to contract with to provide those services.
The law seemed to be written with one organization in mind: the Minnesota Uber/Lyft Drivers Association.
The group was at the forefront of the grassroots campaign for minimum wages for ride-hail drivers, and lucrative contracts with Uber and Lyft promised to be a valuable reward for years of activism.
The groupโs president Eid Ali, however, said in an interview that MULDA has not contracted with either company. He said his organization will continue to advocate for drivers.
โThe pay increase is a positive step though long overdue,โ Ali said. โDrivers are now watching to see how the TNCs comply with the law.โ
Ali and MULDA are currently being sued by former members alleging fraud and deceptive trade practices. Ali denies the allegations and his attorney, Stephen Cooper, moved to dismiss the case.
The minimum wages will likely make competing even more challenging for Uber and Lyft alternatives that entered the market after the two ride hail giants threatened to leave over regulations passed by the Minneapolis City Council. State Democrats banned cities from enacting their own pay standards as part of the state legislation regulating driver pay.
Balazs said thereโs been no reason for him to switch to the other companies, like Wridz or MyWeels, since Uber and Lyft demand remains strong.
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