Minnesota lawmakers and rideshare companies Uber and Lyft have reached a deal to set minimum wage standards for drivers. Announced Saturday night, the agreement emerges from prolonged negotiations between Democratic state officials and the companies, who had threatened to exit the state over a proposed Minneapolis ordinance that aimed to enhance worker protections.

Previously, the Minneapolis City Council passed an ordinance in August 2023, mandating that drivers be paid at least $1.40 per mile and $0.51 per minute. However, following objections from Uber and Lyft, the implementation was delayed.

Under the new statewide agreement, the minimum wage for rideshare drivers will be $1.28 per mile and $0.31 per minute, effective January next year if approved by the Legislature. This statewide rate will override the initially proposed Minneapolis rates. According to Minnesota’s Democratic House Majority Leader Jamie Long, this blended rate represents a 20% increase in pay for drivers. The bill also includes substantial insurance provisions for drivers.

Democratic Senate Majority Leader Erin Murphy highlighted the challenging nature of the compromise, ensuring it balanced the needs of drivers and the public’s reliance on rideshare services. Uber spokesperson Josh Gold acknowledged the forthcoming price increases but expressed relief that the compromise will allow the company to continue operating in Minnesota. Lyft has yet to comment. Minnesota Gov. Tim Walz praised the agreement for providing drivers with a 20% raise while maintaining rideshare services statewide.