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The City of Minneapolis is considering a minimum wage for rideshare drivers. New York City, states Washington and California have all passed legislation setting a minimum wage for app-based workers.
Uber and Lyft drivers are expressing concerns for making less money and local governments are considering changing the driver’s minimum wage, but the companies are warning that it could end up costing riders more, while giving drivers less.
In Minnesota Governor Tim Walz vetoed a bill in May that would have set a minimum wage for rideshare drivers, saying it was not the right bill. Rideshare services threatened to pull its services from greater Minnesota and surge prices in the Twin Cities. Now one of those Twin Cities, Minneapolis, is looking into minimum wage as a way to help workers who say they are seeing a drastic cut in wages.
Mauricio R. Castaneda emigrated from El Salvador to Minnesota over 20 years ago.
“I have three kids. I have a wife. Rent is expensive. With $100, we can buy nothing,” Castaneda said.
Driver Mauricio Castaneda says he doesn’t know how much riders get charged unless they tell him. “It’s sad when they rip you off and rip me off too. There’s no transparency,” he said. (Mills Hayes/Fox News / Fox News)
He’s been driving Lyft for five years and Uber for nine. He says companies are charging riders more and lowering the amount drivers can make per trip, so he’s making less money now than he did just a few years ago.
“Now, I have to work like 18 hours every day, to make $250, sometimes not even 200,” Castaneda said. “Insurance is not cheap; maintenance is not cheap, and we have to do everything.”
Despite struggling to pay his bills, Castaneda says he decided not to work at night.
“It’s dangerous with the carjackings,” Castaneda said. “You have to watch everywhere because you don’t know when anyone is going to attack you.”
Minnesota Uber and Lyft Driver’s Association President Eid Ali says drivers are struggling. “We do have some drivers who are not able to pay their utilities and their gas has been cut off. It’s very serious,” Ali said. He hopes the residents of Minne (Mills Hayes/Fox News / Fox News)
The Minnesota Uber and Lyft Driver’s Association says they want three things; better pay, safety issues addressed and protection against deactivation. Eid Ali is the president of the association. He says many drivers are immigrants who are new to this country and have education and language barriers that prevent them from seeking alternative work.
HOW LYFT, UBER DIFFER AS RIDESHARE WARS ESCALATE
“Hopefully, the living standard of those drivers who have been struggling to make ends meet will improve,” Ali said about the potential for drivers to get a minimum wage. Under the ordinance, drivers would get at least $1.40 per mile and $0.51 per minute, or $5, whichever is greater.
Lyft says the increased fares could result in a 60% decrease in rides, which would lead to a 25% decrease in overall driver pay. But some drivers say ride companies have all the power and should share some of the wealth. (Mills Hayes/Fox News / Fox News)
Fox spoke with Sergio Avedian, an Uber driver in Los Angeles and senior contributor for the media site, “The Rideshare Guy.” Avedian says he was making $1.40 a mile and $0.35 cents a minute in 2015. By October 2022, he was making $0.60 cents a mile and $0.21 cents a minute. He says the story is similar when he drives with Lyft too.
MINNESOTA GOV. TIM WALZ VETOES PAY RAISE FOR RIDESHARE DRIVERS AFTER UBER THREATENS TO CUT OFF SERVICE
Uber did not immediately respond to a request about the Minneapolis city council proposal but has previously said a Minnesota minimum wage would increase the cost of rides by at least 50% and lead to at least 30% fewer tips. The company offered to pay $1.17 per mile and 34 cents per minute, but the legislature rejected the offer. Lyft said the Minneapolis plan could double rider fares, leading to fewer rides, and a potential drop in drivers’ pay.
Associate Professor of Management, Peter Norlander, Ph. D. researches employment relations and gig workers.
Uber and Lyft have been very active politically at the local level,” Norlander said.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UBER | UBER TECHNOLOGIES INC. | 46.66 | -2.81 | -5.69% |
| LYFT | LYFT INC. | 12.23 | -0.48 | -3.78% |
NYC SUED BY FOOD DELIVERY SERVICES OVER NEW MINIMUM WAGE LAW
New York City and states Washington and California have all passed laws that would give drivers a minimum wage. Uber, Door Dash and Grubhub sued New York City over their law and California’s Prop 22 is headed to the state’s supreme court.
“The lack of transparency that Uber and Lyft have about wages is basically one of the reasons why it’s really frustrating for a lot of drivers who work for them. Workers at the end of the day don’t know how much money they’re going to earn,” Norlander said.
Norlander says the future looks very unsettled. “Workers and employers are both looking for greater shares of the pie, and they are going to look to their allies in government,” he said.
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Avedian says California’s Prop. 22 isn’t working and if it’s overturned by the state’s supreme court, he hopes the state will adopt a similar policy to Washington’s. A policy he considers the “playbook.”
Colorado and Massachusetts state legislators have expressed interest in setting a minimum wage for Uber and Lyft drivers too.
