Another look at the new rideshare law

Cam Gordon


Many people are celebrating the recent rideshare legislation that was signed into law in May.
Elected officials are congratulating themselves and others for the new law that is expected to give drivers a 20% raise in pay, protection from unjust deactivations, and stronger insurance provisions.
“The drivers never gave up,” said Jason Chavez, Ward 9 City Council member. “They showed up and kept reminding everyone about the importance of standing up for workers across Minnesota. There is no ride-share without these drivers. Let’s celebrate this win.”
“I’m proud of our city and state delegation for working together on a nation-leading bill that delivers for drivers not only in Minneapolis, but across our state,” said DFL state Rep. Samantha Sencer-Mura from the Southside’s District 63A. “We can all be proud of this win.”
“My message has not changed since we did this work last year,” said Southside state Rep. Hodan Hassan (62B), who authored the bill. “If your business relies on keeping your workers in poverty, you don’t have a viable business model, and you need to do better here in Minnesota. We will not tolerate bad actors exploiting hardworking Minnesotans to pad their corporate pockets. The protections established in this bill will drastically improve working conditions for an entire workforce so many of us rely on.”
Aurin Chowdhury, the Ward 12 City Council member, said, “The City Council members who held firm in passing local legislation that is strong in comprehensively protecting workers last year and this year, forced the conversation. We thank the state authors, Minneapolis delegation, POCI Caucus, and Queer Caucus for working with us closely over the last two years to achieve this outcome.”
Less vocal are the quiet cheers likely coming from rideshare customers of the two large companies that had threatened to stop doing business in the city. Uber and Lyft are also likely celebrating. They will no longer feel any pressure to follow through with their threat. They won concessions and demonstrated their ability to manipulate democratic processes.
Under the new state law, rideshare companies will have to pay drivers a minimum of $1.28 per mile and 31 cents per minute. They will not have to pay the rates the Minneapolis City Council adopted earlier, which were set to take effect July 1 with a $1.40 per mile and 51 cents per minute minimum.
Among the concessions won by Uber and Lyft is one allowing the new legislation to override Minneapolis’s driver pay ordinance and restrict a city’s ability to demand data from the rideshare companies. It also prohibits, or preempts, any city in the state of Minnesota from passing stronger local rideshare laws or regulations of their own.
“Preemption is bad. Period,” said Aisha Chughtai, Ward 10 City Council member. “Any and all attempts to undermine local control are bad. It’s a Republican and corporate tactic used around the country. Watching our @GovTimWalz cave to multibillion-dollar corporations in insisting on preempting Minneapolis is gross.”
The preemption means that the legislation could be changed in the future and that cities would have no hope of creating stronger rules, as the Minneapolis City Council did this year.
Some are hopeful that this will mean an end to the corporate duopoly that has dominated the rideshare industry and exploited and extracted money from local drivers and customers alike.
Others are less certain.
Given the track records, deep pockets, patience and cleverness of these companies to use legal gray areas to maximize their revenue, it is easy to imagine that this story is a long way from over.
Neither Uber nor Lyft is based in Minneapolis, or even Minnesota. They both have a history of subverting local laws, and likely drove out smaller, local taxi and limousine companies when they entered the market here.
Uber and Lyft classify the drivers they “hire” as independent contractors. The large companies have exploited this, making contracted drivers responsible for paying taxes. The companies also avoid providing benefits such as health insurance, paid sick time and workers’ compensation.
By having drivers use their own cars and not be part of a company, they avoided car inspections and the requirement to obtain a city taxi license or a state limousine license, and the drivers were not required to have taxicab driver licenses.
When Uber and Lyft threatened to leave, in fact, several new, locally-based companies were working to fill the void. Now it is unclear if those efforts will continue.
Shortly after the legislation was approved, an Uber spokesperson reportedly told Axios that “coming price increases may hurt riders and drivers alike.”
It appears that at least one of the companies, Uber, spent time and money to influence the process here, including running ads online regularly. One ad that appeared weekly on Blois Olson’s Fluence Media stated, “The Minneapolis City Council is forcing Uber out. Save our rides.”
As reported by Business Insider, Uber had an operating profit of $1.1 billion in 2023, and $37.2 billion in revenue for 2023. Their chief executive Dara Khosrowshahi’s total compensation last year was $24.3 million, according to MarketWatch. That included $1 million in base salary, about $14.3 million in stock awards, about $5.9 million in option awards, and a $2.9 million bonus.
Lyft’s revenue was reported to be $4.4 billion and their CEO David Risher’s total yearly compensation was $78.25 million.
According to the Washington Post, Uber has hired private lobbyists in at least 50 U.S. cities and states. In 2014, the Post reported, Uber spent $475,000 over five months to influence California lawmakers.
Recently, according to Verge, Uber announced that it is spending $30 million in California’s upcoming races to elect “friendly lawmakers.”
It is probably just a matter of time, lobbying and many campaign contributions before they will be back at the legislature, distracting us from more important work, fighting to undo and weaken the rideshare law, and when that time comes, we will have no ability for city governments to step in.
Given the promising new local companies that seemed poised to step up, I wonder – what if they had left?
Given Uber and Lyft’s tactics and lack of concern for the welfare of the local community as well as their inability to accept the decisions of the democratically-elected representatives where they operate, I wonder – wouldn’t we be better off without them?

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