In a bid to prevent Uber and Lyft from leaving parts of the state, Minnesota Governor Tim Walz and Democratic-Farmer-Labor (DFL) leaders of the House and Senate have announced a deal on minimum pay standards for ride-hailing drivers. The agreement, announced at a news conference on Saturday, preempts a recent ordinance by the Minneapolis City Council and establishes a statewide minimum rate of $1.28 per mile and 31 cents per minute.

Under the agreed-upon rates, Uber has confirmed that it will continue operating in Minnesota. Governor Walz hailed the deal, stating that no other state has been able to achieve such a compromise. He emphasized that Minnesotans will still have the option to use these services if they choose to do so.

The negotiations were deemed critical to avoid the departure of Uber and Lyft, who had previously announced plans to leave the state as a result of the Minneapolis ordinance. The city ordinance, originally set to take effect on May 1, would require a higher rate of $1.41 per mile and 51 cents per minute, or at least a $5 minimum per ride.

The agreement comes after two years of work on the proposal, according to Senator Omar Fateh, the lead sponsor of the bill. On Saturday, Senator Fateh, along with staff and DFL leaders, spent the day in negotiations to finalize the bill's details. The negotiations caused an 11-hour recess in the Senate, bringing all other legislative work to a standstill.

A study conducted by the state Department of Labor and Industry estimated that, in the Twin Cities metro area, a rate of 89 cents per mile and 49 cents per minute was necessary to approximate the minimum wage, or $1.21 per mile to provide drivers with additional benefits. The suggested per-mile rate ranged from $1.16 to $1.40 for drivers in greater Minnesota due to the longer distances between fares.

Earlier this month, Uber proposed a rate of 68 cents per mile as a negotiating tactic, aiming to align with the lower end of the study's findings. However, the final agreement sets the rate at $1.28 per mile and 31 cents per minute.

The deal means that drivers will make $17.45 for a 10-mile, 15-minute ride. The rates proposed by DFL leaders would have resulted in $20.05 for the same trip, while the original Minneapolis ordinance would have provided drivers with $21.75.

While the agreement represents a compromise, not all City Council members are satisfied. Council Vice President Aisha Chughtai expressed her disapproval, calling preemption bad and stating that it undermines local control. Nevertheless, Minneapolis Mayor Jacob Frey expressed gratitude towards state officials for arriving at a working figure that aligns with his earlier proposal.

With just over 24 hours remaining in the legislative session, it remains unclear whether a special session will be required to address other outstanding bills, including a sports betting bill and a statewide infrastructure package. Republican legislative leaders have voiced their frustration, claiming they were not involved in the negotiations and were kept in the dark regarding the details of the Uber and Lyft deal.

As the clock ticks down on the legislative session, both Democrats and Republicans face the challenge of completing their work amid the limited time remaining.