Minnesota Gov. Tim Walz on Thursday vetoed a bill that would have guaranteed minimum wages and other protections for Uber and Lyft drivers.
“Ride-hailing drivers deserve safe working conditions and fair wages, and I am committed to finding solutions to these issues that balance the interests of all Minnesotans, drivers and riders,” Mr. Walz, a Democrat, told the state legislature. wrote in a letter. Speaker of the Minnesota House of Representatives. But he said the legislation that passed the state legislature last week “is not the right bill” to achieve those goals.
The bill was seen as a major victory for labor advocates who have been campaigning for a greater good for gig drivers across the country. Uber and Lyft treat their drivers as independent contractors rather than employees, meaning drivers are responsible for their own expenses and receive no health care or other benefits. The companies say their business models allow drivers to maintain the flexibility they want.
The legislation would require Uber and Lyft to pay their drivers at least $1.45 per mile they drive passengers, or $1.34 per mile outside of Minneapolis-St. Louis. Paul area, and $0.34 per minute. It will also establish a review process for drivers to protest their suspension from the platform.
Mr. Walz backed arguments for Uber and Lyft, which say the minimum wage is too high for a region like Minnesota and will require them to significantly scale back their ride-sharing operations in the state as rider costs rise.
Earlier Thursday, Uber said it would exit Minnesota in early August if the bill passes, retaining its premium service only in the state’s largest metro area.
“This bill could make Minnesota one of the most expensive states in the country for carpooling, potentially putting us on a par with New York City and Seattle — cities where the cost of living is much higher than in Minnesota,” Wall said. Mr. Ze wrote in the letter.
In addition to the veto — his first — Mr. Walz issued an executive order creating a commission to study ride-sharing in Minnesota and recommend policy changes to ensure drivers are fairly compensated .
Uber welcomed the news and said it would support a different bill that would provide a slightly lower minimum wage and ensure drivers are classified as independent contractors rather than employees in the state of Minnesota, which the company Long-term goals to advance in other states.
“We welcome the opportunity to address this issue and look forward to the swift passage of the compromise by the legislature in February,” said Uber spokesman Freddy Goldstein.
Lyft spokesman CJ Macklin added, “Lawmakers should pass fair pay and other protections, but in a way that doesn’t jeopardize the affordability and safety of those who rely on the service.”
State Senator Omar Fateh, one of the bill’s authors, criticized Mr. Walz’s decision on Twitter.
“Today, we see electric companies controlling our government,” he wrote. “The battle is not over and I promise you I will not back down.”