House panel advances labor legislation targeting working conditions for rideshare drivers

The life of a rideshare driver with Uber or Lyft is not easy. Long hours on the road, little pay, and risk of physical violence from passengers is the industry norm.

Issues around driver safety and dignity have been festering for years in Minnesota, and Rep. Hodan Hassan (DFL-Mpls) believes legislative action is now necessary to protect these workers. She sponsors HF2369, which would create a novel regulatory framework of transportation network companies.

“[Drivers] have often been left without the same protections and benefits that other workers receive,” she said. “This bill establishes important protections for transportation network company drivers in Minnesota and ensures they have the necessary rights and benefits to perform their jobs safely and securely.”

The House Labor and Industry Finance and Policy Committee approved the measure Thursday on a party-line 6-5 vote. The House Commerce Finance and Policy Committee gets the bill next.

As currently drafted, the bill would apply to companies that utilize a digital network to connect riders or package deliveries to drivers who then provide prearranged transportation.

These companies would have to provide drivers with personal injury insurance of at least equal value to statutorily defined workers’ compensation insurance. Insurance coverage for vehicle damages, passenger injuries, and third-party injuries would have to be provided as well.

Minimum compensation would be guaranteed to drivers. The bill calls for at least $2.55 per mile and 65 cents per minute to be paid to drivers on a per trip basis under normal circumstances. During periods of surge pricing, drivers would be paid 85% of any fee or fare increases. When drivers must travel in excess of 5 miles to pick up a passenger or package, they would be compensated at least $1.25 per mile and 20 cents per minute.

These minimum wage guarantees would be subject to cost-of-living raises every July 1.

Companies would have to reimburse drivers for various business expenses, such as:

• 10 cents per mile driven for the cost of gasoline;
• 31 cents per mile driven for vehicle wear and tear; and
• the full cost of all tolls.

The deactivation of rideshare drivers is currently an opaque process that has left many workers suddenly without a job. The bill would address this by requiring companies to establish clear written rules that state when a driver can be deactivated. Deactivated drivers would also be guaranteed an appeals hearing to make the case for why they should remain on a rideshare application.

The Department of Labor and Industry would be tasked with facilitating “the creation of a driver resource center to assist in implementing the goals and purposes” of the bill. Twenty-five cents would be collected from companies per trip and transferred to a newly created fund in the state treasury to finance the activities of the center.

Additional protections would include: retaliation and discrimination prohibitions; guarantee of equal access to rideshare assignments; affirmation of drivers’ right to sue for damages; and a directive for this bill to be attached to all current and future driver contracts.

As a last resort, a transportation network company could have their license to operate revoked by a local unit of government for failure to comply with this legislation.

Over a half dozen drivers testified about their working conditions before a hearing room that was nearly filled to capacity by their fellow workers.

Eid Ali is president of the Minnesota Uber/Lyft Drivers Association and has supported his family of five as a rideshare driver since 2014. He noted that when he first started driving, the companies would pay out $1.94 per mile. Compensation is now 84 cents per mile.

Abdulahi Abdi worked for six years driving over 18,000 passengers for Uber and Lyft. Speaking through a translator, he told a harrowing story of being assaulted by an Uber passenger in 2021. He was severely injured and has yet to receive any compensation from the company for being attacked while on the job.

Freddie Goldstein, an Uber communications manager, spoke in opposition to the bill.

“HF2369 will hurt drivers, consumers, and the Minnesota businesses that rely on rideshare. If passed in its current form, the bill would make Minneapolis the most expensive city for rideshare in the country,” she said.

Jill Sims, director of government relations with Hospitality Minnesota, also expressed alarm that the bill would encompass food delivery companies and in-house restaurant delivery services.

Hassan assured the committee that the intent of her proposal is to only regulate the rideshare industry not food delivery, and that the next engrossment of the bill will make this clear.