Uber and Lyft driver pay raise bill blocked by Minnesota governor Tim Walz

“Rideshare drivers deserve fair wages and safe working conditions,” Walz said in a statement announcing his first veto ever in his five-plus years as governor. “I am committed to finding solutions that balance the interests of all parties, including drivers and riders. This is not the right bill to achieve these goals.”

Uber threatened to offer only premium-priced service in the Minneapolis-St. Paul area and cut off service altogether in the rest of Minnesota if Walz signed the legislation.

“This bill could make Minnesota one of the most expensive states in the country for rideshare, potentially putting us on par with the cost of rides in New York City and Seattle — cities with dramatically higher costs of living than Minnesota,” the Democratic governor said in a letter to legislative leaders.

Uber and Lyft drivers had staged noisy but peaceful demonstrations outside Walz’s office in the Capitol in recent days to demand that the governor sign the bill. They were clearly audible through closed doors earlier Thursday as he signed a bill creating a paid family and medical leave system.

Ride-hailing drivers, like other gig economy workers, are typically treated as independent contractors not entitled to minimum wages and other benefits, and have to cover their own gas and car payments. A California appeals court ruled in March that companies like Uber and Lyft could continue to treat their drivers there as independent contractors.

But most gig workers in Seattle became entitled to paid sick leave and safe time under a first-in-the-nation law enacted there in March. And the Biden administration proposed new standards last year that could make it more difficult to classify millions of workers as independent contractors and deny them minimum wage and benefits. Ride-hailing and delivery driving are among the deadliest occupations in the country, according to occupational fatalities and injury data from the Bureau of Labor Statistics.

While Walz vetoed the bill, he also signed an executive order commissioning a study about the working conditions of ride-hail drivers and how potential changes could affect costs and access for riders.

His order also sets up a committee to make recommendations by Jan. 1 for legislation to ensure…