Gov. Tim Walz: Replacement app before Uber and Lyft leave Minneapolis is "magical thinking," wants solution so companies stay
OAKDALE, Minn. — Gov. Tim Walz on Monday reiterated he wants to find a compromise to increase rideshare driver pay but keep Uber and Lyft operating in the Twin Cities, after the companies said they would exit Minneapolis due to its city ordinance.
The new local law requires a minimum wage of $1.40 per mile and 51 cents per minute for drivers — a rate the companies argue is not sustainable. But drivers say their current pay is not enough to get by to support themselves and their families.
A state study by the Minnesota Department of Labor and Industry determined drivers need $0.89 cents per mile and $0.49 cents per minute to make the equivalent of the $15.57 Minneapolis minimum wage requirement for businesses. The analysis, which looked at 18 million rides across the state last year, said a mileage rate of $1.20 would cover "additional more comprehensive benefit expenses." Both are lower than the city's plan.
The governor said he is trying to find a path forward with stakeholders, but noted the window before the self-imposed departure deadline by Uber and Lyft is shrinking. The council may reconsider its ordinance and subsequent override of Mayor Jacob Frey's veto of it at a meeting next week.
"The most efficient way to fix this is to ask the Minneapolis City Council to come back and use the state study," Walz said.
The state legislature is considering its own proposals to set statewide minimum wage rates, but the requirements, as they are written now, are nearly identical to the city's. Last Friday, some drivers announced they would launch a co-op, which has operated in New York City for a few years with thousands of drivers participating, in absence of Uber and Lyft.
"We're not going to be intimidated. We're not going to be threatened by them," said Mariana Brown, the vice president of the Minnesota Uber/Lyft Drivers Association during a news conference announcing their intent to join The Drivers Cooperative, which boasts that drivers make 8-10% more than Uber and Lyft.
The app is available for download and hundreds joined within hours of the announcement, drivers said.
On Monday, Walz was skeptical any alternative service would be able to plug a gap in service quickly if the companies do leave the city.
"We have what I can only describe as magical thinking that in the next 30 days, somebody's going to create a new app that folks around the world and country are going to know to use when they come to Minneapolis, and they're going to figure out how to make the economics work on that," Walz said. "So I've been asking all the folks to get back to the table."
Republicans at the state capitol want legislation that would simply override the local ordinance, though that is unlikely in a DFL-controlled legislature. House Minority Leader Jamie Long, DFL-Minneapolis, when asked recently by reporters if Democrats would want a preemption clause, he said he is "hoping we can work with the council where we can find a path forward to find agreement."