A plan to increase pay for Uber and Lyft drivers in Minnesota, which lawmakers think would keep the companies from exiting the market, progressed in the state Legislature on Sunday before the midnight cutoff.

The House Agreement on The Drivers' Pay Package

The House approved the compensation bill, but it was delayed in the Senate before receiving approval just before the deadline for lawmakers to pass bills before adjourning. The bill now heads to Governor Tim Walz for signing into law, as reported by the Star Tribune.

Democrats crafted the proposal that initially gained approval in the House to replace a minimum pay measure passed by the Minneapolis City Council, which caused Uber and Lyft to threaten to leave the state's largest city.

READ ALSO: Lyft, Uber Disappointed with Council Overriding Pay Increase Veto, Retaliates by Ceasing Minneapolis, Twin Cities' Services

The House agreement, announced Saturday after a day of negotiations, sets a minimum pay rate at $1.28 per mile and 31 cents per minute. Uber stated on Monday that it will continue operating in the state under these rates, with the bill set to take effect in December.

Uber and Lyft's Acknowledgement

Rde-hailing companies Uber and Lyft announced they will continue operating in Minnesota following the passage of a state measure that increases driver pay, though at a lower rate than what Minneapolis officials approved earlier this year. Although the new pay minimums are lower than the rate approved by the Minneapolis City Council in March, they aim to ensure that drivers across the state earn at least the city's minimum hourly wage of $15.57, which could also result in higher costs for passengers.

Uber acknowledges that upcoming price increases may impact both riders and drivers. Still, the company will be able to continue operating statewide under the compromise arranged by the Governor, according to spokesperson Josh Gold in an email to the Star Tribune.

Lyft spokesperson CJ Macklin stated that they have reached common ground to balance a new pay increase for drivers with what riders can afford, ensuring the continuation of service to both riders and drivers across the state.

The Rideshare Drivers' Pay Increase

The proposed regulation that drew criticism from the companies would have mandated payment of at least $1.40 per mile and 51 cents per minute, or a minimum of $5 per ride, whichever amount is higher, excluding tips, for the duration of passenger transportation within Minneapolis.

Marianna Brown, vice president of the Minnesota Uber/Lyft Drivers Association, told the Star Tribune that although the pay rates are lower than drivers had sought, they were pleased to see the deal come together.

Following the House passage, the Governor stated on social media platform X that the deal provides rideshare drivers with a 20% raise and ensures these essential services continue operating in Minnesota. He expressed gratitude to the House and Senate DFL partners for their collaboration in achieving this outcome.

RELATED ARTICLE:  Lyft Will Allow Riders To Donate To Charity Through Its Round-Up Program