Minnesota Gov. Tim Walz (D) vetoed a bill that would have required a pay raise for ride-booking drivers after Uber threatened to stop its services in most of the state over the legislation.
The state House and Senate both narrowly passed the bill earlier this month to establish a minimum wage for gig workers, including drivers for the companies Uber and Lyft.
The Minnesota Star-Tribune reported the legislation would require that ride-booking drivers be paid at least $1.45 per mile driven and at least 34 cents per minute.
But Walz’s office said in a release that he chose to veto the bill, deciding that it should not become law at least in its current form. The release states that Walz also issued an executive order to commission a study on the topic and form a working group to propose recommendations for rideshare legislation during the next session.
Uber spokeswoman Freddi Goldstein said the company would stop operating outside the Minneapolis-St. Paul metropolitan area starting Aug. 1 if the bill became law. She vowed the company would also only offer premium rides that would charge consumers more to match what the bill requires.
“Following several months of unanswered requests to work with legislators on comprehensive legislation that provides flexibility and benefits to drivers without compromising service for riders, we are left with a bill that will make it impossible to continue serving most areas of the state,” Goldstein said.
The minimum wages would have also been tied to inflation and would be adjusted annually on July 1, according to the Star-Tribune.
Both Uber and Lyft had called on Walz to veto the bill, arguing it would cause prices for consumers to significantly increase.
The local outlet also reported Walz called the bill an “important piece of legislation” and led discussions about supporting gig workers are needed, but he did not commit to signing it.
“Rideshare drivers deserve fair wages and safe working conditions. I am committed to finding solutions that balance the interests of all parties, including drivers and riders,” Walz said in the release. “This is not the right bill to achieve these goals. I have spent my career fighting for workers, and I will continue to work with drivers, riders, and rideshare companies to address the concerns that this bill sought to address.”
The working group will comprise legislators, drivers, ride-hailing company representatives, workers, riders and others. The order also requires the state’s Department of Labor and Industry to commission a study to review data on ride-hailing drivers’ working conditions and how any potential changes might affect access and costs for riders, according to the release.
Uber said its market analysis determined that the wage increase would cause the cost of rides to increase by at least 50 percent and cause trips to drop at least 30 percent as a result. The company added that it had already offered to pay $1.17 per mile and 34 cents per minute as a compromise, but the offer wasn’t accepted.
CBS reported Walz said at a press conference in response to Uber’s statement that it is part of the “considerations” that need to be taken.
Washington became the first state in the country to create a minimum wage and benefits for ride-booking drivers last year. Cities like Seattle and New York have also taken steps to set a minimum pay for drivers.