The Minnesota Senate passed a bill on Sunday that would guarantee Uber and Lyft drivers a minimum wage and other benefits, sending the measure to Gov. Tim Waltz.
The narrow margin, 35-32 after earlier approval by the state House 69-61, capped a dramatic week of political maneuvering to clear the bill before the end of Monday’s session. Uber and Lyft drivers are known as gig workers because they are treated as independent contractors, meaning they are responsible for their own expenses and are not guaranteed a minimum wage, health care or other benefits.
If signed by the governor, the legislation would require Uber and Lyft to pay their drivers at least $1.45 per mile they drive a passenger, or $1.34 per mile between Minneapolis-St. Paul County — as well as $0.34 per minute. It also establishes an appeals process through which drivers can request a review if they believe they have been wrongly disconnected from the platforms, and requires additional transparency about the calculation of driver earnings.
Mr. Waltz called the bill “an important piece of legislation” but also said more conversations needed to happen before he could commit to signing it.
The bill is a rare victory for labor advocates in what has turned into a long, multi-national battle over drivers’ rights and their status in the economy. Uber and Lyft have long maintained that their drivers are independent contractors, not employees. They say drivers prefer being a contractor because it gives them the flexibility to choose when they work, and many drivers only work part-time.
But labor advocates argue that drivers are exploited by companies and misclassified as independent, even though ride-hailing services exercise significant control over their work.
The federal government has largely avoided weighing in on the debate, and the U.S. Department of Labor has not sued or targeted Uber or Lyft for misclassifying workers. Instead, the issue has been brought up in state courts and legislatures and on the ballot.
New York and Seattle have passed laws guaranteeing a minimum wage for gig drivers, while companies have won California and the rest of Washington state to get their preferred rules on the books. Both states passed laws that guarantee drivers some benefits, such as a minimum wage, but also prevent them from becoming employees. Massachusetts judges rejected a similar company-backed effort last year.
Senator Omar Fateh, one of the bill’s authors, welcomed its passage. “These workers deserve a living wage to provide for themselves and their families.”
Mr. Fateh and the Minnesota Uber/Lyft Drivers Association, a group supporting the bill, celebrated outside the legislative chamber on Sunday.
Uber and Lyft have criticized the Minnesota bill, arguing that it raises wages too much and that the deactivation appeals process would limit their ability to ban drivers accused of misconduct. The companies said the extra costs would be passed on to riders, forcing them to pay more, and instead offered a guarantee of $1.17 per mile, along with $0.34 per minute. Uber has said it may cut service in Minnesota, a threat it previously threatened in other states.
“If this bill were to pass, we would unfortunately have no choice but to greatly reduce service across the state and possibly cease operations entirely,” Uber said in a message to its Minnesota customers.
Lyft has warned its customers that their fares could more than double if the bill passes, turning the “rideshare into an expensive luxury.”