Many Uber or Lyft drivers have a horror story about trips where they ended up losing money — either their own tale, or a screenshot from a fellow rideshare driver traded in chat rooms and WhatsApp groups.
For a one-way trip from the Twin Cities to St. Cloud, one driver got a $50 payout, and he said a large portion of it was swallowed up by gas costs. Another received under $12 for a ride from the airport to Roseville — until the passenger added a tip.
Driver Ahmed Ahmed earned less than $5 for a recent 21-minute trip through the south suburbs — compensation that didn’t account for the time he spent driving to pick up the passenger.
“The living cost is high. The gas is high,” Ahmed said. “We own the car. We pay maintenance. So what we’re asking is to get our fair share.”
So, the Minnesota Uber and Lyft Drivers Association (MULDA) has been pushing elected officials to set minimum pay rates. Their statewide push failed after Gov. Tim Walz vetoed a package of regulations on rideshare companies, in part after Uber threatened to drastically reduce service offerings in the state.
Now, the group is pushing Minneapolis officials to enact a very similar policy that would cover drivers only when they’re carrying passengers within the city limits.
Next week, the full City Council is set to vote on a proposal that’s nearly identical to the vetoed statewide regulations. If enacted, rideshare companies would have to pay drivers operating in Minneapolis at least $1.40 per mile, plus 55 cents per minute, and guarantee that the driver would earn at least $5 total for every ride in the city limits.
The proposal could more-than double driver pay in Minneapolis, according to figures from another advocacy group, the Minnesota Rideshare Drivers Association (MRDA). Currently, MRDA estimates that Uber drivers in the Twin Cities make around 60 cents per mile plus 14 cents per minute. Uber spokesperson Freddi Goldstein could not confirm the accuracy of these figures, saying that driver pay fluctuates depending on a number of factors.
If the City Council approves the ordinance next week, it would need Mayor Jacob Frey’s signature. He has not taken a position on the proposal.
The mayor “supports drivers being paid more. How to get there is very complex and requires more information,” spokesperson Ally Peters wrote in a statement. “This ordinance has moved through the legislative process with little deliberation, and there is essential information needed — including from [rideshare companies] — to make good, transparent policy decisions.”
MULDA president Eid Ali said last week that he’d met with Frey, and he said the mayor was “still learning the issue.”
Supporters of Minneapolis’ proposed “transportation network company” ordinance say their central aim is to ensure drivers receive a larger share of the revenues from each ride.
Uber and Lyft are “claiming we’re asking them to charge more money to the customer. That’s not our goal; that’s not what we want,” said Ahmed, who showed the receipt of his less-than-$5 fare to a City Council committee during a hearing this week. “We want [the rideshare companies] to give us our fair share.”
“We talk to the riders,” said another driver, Ahmed Hirsi, “and there are cases of the riders telling us how much he’s getting charged and Uber getting 60% of that. Is that fair?”
But Goldstein said these drivers were overstating Uber’s cut of every fare. In the company’s most recent quarterly earnings report, 21% of the gross revenues from Uber rides went to the company. The remainder went to the drivers.
If Minneapolis enacts the proposed ordinance, Uber representatives warned in written comments that passengers would likely pay more. They pointed to similar regulations that Seattle’s elected leaders enacted in 2020. Uber contended Seattle’s ordinance slowed the post-pandemic recovery of the rideshare economy in that city; passengers were less willing to pay higher rates for a ride.
The company also raised concerns about the potential for metro-wide ripple effects. Before Washington adopted statewide minimum rates for rideshare drivers, Uber said drivers were less willing to accept rides outside the city. They raised concerns about drivers being less willing to serve the Minneapolis-St. Paul International Airport, which is outside city limits.
Some drivers share these concerns, and fear Minneapolis’ ordinance could have effects on their bottom lines.
“Most of our trips start outside of Minneapolis. The airport is one of the biggest sources of trips,” said Omar Adan, vice president of MRDA, a group that favors a more-conciliatory approach to negotiations with the rideshare companies. “This ordinance, in my view, will not benefit us much.”
When the Minnesota Legislature was still debating a statewide rideshare law, Adan said MRDA negotiated with Uber to raise the minimum to $1.17 per mile and 34 cents per minute. MRDA contended this was still a vast improvement over current pay rates, though they weren’t as high as the ones in the bill Walz vetoed: in the metro area, $1.45 per mile and 14 cents per minute.
“You cannot just take it very high at one time; it’s not good for the public,” said Shueb Mohamed, another MRDA officer, who said these pay minimums could still be set to keep pace with inflation.
After Walz vetoed the statewide rideshare bill, he created a task force that was meant to study concerns like these and submit recommendations for “compensation and fair treatment of drivers.” MRDA-allied drivers said they want the city to hold off on enacting regulations until the task force completes its work.
“If you want to support us as council members, we say cooperate with the governor’s task force,” Adan said.
A deal on statewide regulations may be possible. Washington state enacted a rideshare law that guaranteed minimum pay for drivers — $1.17 per mile plus a per-minute rate outside Seattle, and $1.38 plus a per-minute rate for trips starting in Seattle — as well as access to paid sick leave. A “Driver Resource Center” was meant to help drivers work through issues “related to getting deactivated from the platform,” investigating claims and handling appeals.
Like Washington state’s law, Minneapolis’ ordinance also calls for a contract that would create a Driver Resource Center, and outlines rights for drivers who are deactivated.
Crucially, Washington state’s law locked in drivers’ status as independent contractors and not as employees of the ridesharing companies, which prevents them from unionizing under federal law. (MRDA prefers that drivers be allowed to remain independent contractors.)
But MULDA-allied drivers don’t agree with MRDA’s more piecemeal approach. They have pushed for the city’s ordinance for months, saying drivers are desperate for bold action to ensure that they’ll be able to pay their bills.
“We have to bring food to the table, and we don’t make enough money,” said driver Mauricio Castaneda, “working 24 hours, all day long, to bring in $200 or $250 is not fair. We use $50 for gasoline — gasoline is so expensive — and by the time we split up that $200 for maintenance… it’s a lot of expenses.”
“We live in the city and we serve the city,” Hirsi said, saying Uber drivers are often called to transport people who are having medical situations. “We want [the mayor] to understand that.”
“In addition to that, many of us voted for [Frey],” Ali chimed in, “we are the residents of Minneapolis as well.”