Report shows ride share drivers in metro make less than minimum wage; Lyft disagrees
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Updated: 7:35 p.m.
The average net hourly wage for drivers working for transportation network companies like Uber and Lyft falls below the minimum wage rates in both Minneapolis and St. Paul. That’s according to data released Friday by the state Department of Labor and Industry. The report comes the day after the city of Minneapolis passed an ordinance designed to boost the minimum wage for drivers to $15.57 — the current rate in the city.
However, the report does not specifically break down how much drivers operating in Minneapolis earn.
Mayor Jacob Frey issued a veto notice Friday. And while Frey says he supports higher wages for drivers, he said the council should have waited to see the results of the report before passing the ordinance.
“The council’s policy is not based in reality,” Frey told reporters at a press conference.
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A special session will be held next Thursday during which the council can try to override his veto. The ordinance passed Thursday by 9-4, which — if it holds — would be enough to push the legislation through. Frey has said he believes the council’s attempt to override his veto will fail.
Lyft is skeptical of the data.
“The only part of this report that is grounded in reasonable data is its conclusion that Minnesota rideshare drivers earn more than $52 per hour of giving rides,” reads a statement from a company spokesperson. “The rest is nonsensical.”
The spokesperson goes on to say study authors significantly overstate the amount of drivers expenses.
Uber officials are also critical of the report.
“While the study is deeply flawed, it clearly recognizes that drivers are independent contractors,” reads a statement from a company spokesperson. “With the State and, most importantly, drivers agreeing that flexibility is critical, any compromise must prioritize independent contractor status. It’s also now clear that the Minneapolis minimum wage proposal is off by a whopping 60 percent."
Both Uber and Lyft say they will stop service in Minnesota if the ordinance survives Frey’s veto.
Council Member Robin Wonsley defended the report, compiled by James Parrott of The New School and Michael Reich from the University of California, Berkeley.
“Both the DLI study and Minneapolis study use the best available methodology, applied to different jurisdictions,” Wonsley said in an emailed statement. “The DLI compensation rates for the seven-county metro area includes urban, suburban, exurban, and rural geographies as far out as Forest Lake, Chaska and Hastings, while the Minneapolis study was done by and for Minneapolis legislation.”
The report compares the pay rates of drivers who work primarily in the metro area and those who drive in Greater Minnesota. According to the study, which is based on 18 million rides in 2022, metro drivers earned an average of $5 — $9 more per hour than non-metro drivers.
More than 1,800 network company drivers were surveyed for the report. The majority of drivers are male immigrants and predominantly Black or African American. Many drivers live below the poverty line and are disproportionately reliant on public assistance.
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