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Uber Technologies, Inc (NYSE:UBER) and Lyft, Inc (NASDAQ:LYFT) drivers in Minnesota will receive higher pay starting January 1, 2025, thanks to a new law resulting from negotiations between the state and these ride-hailing giants.
Governor Tim Walz, who supports the bill and will likely sign it, has agreed on rates of at least $1.28 per mile and $0.31 per minute for drivers.
The rates align with a state study’s recommendations, which suggested earnings between $0.89 and $1.207 per mile and $0.487 per minute, TechCrunch reports.
Also Read: Uber And Lyft Drivers’ Future Hangs In Balance As Massachusetts Supreme Court Deliberates
The legislation offers compromises that benefit all parties involved but could increase costs for riders.
The bill provides protections such as vehicle insurance and injury compensation for drivers, reflecting similar measures in New York City, where Uber and Lyft contribute to the Black Car Fund, adding a 2.75% levy on each fare to cover worker’s compensation.
Governor Walz had vetoed an earlier version of the bill, citing concerns about high ride-hailing costs in Minnesota.
Meanwhile, Uber and Lyft have been lobbying, spending $220,000 collectively in Minnesota in 2023.
In May, Uber reported fiscal first-quarter 2024 revenue growth of 15% year-on-year to $10.10 billion, lagging the analyst consensus of $10.11 billion. Uber’s GAAP EPS of $(0.32) loss missed the analyst consensus loss of $(0.23).
Trips grew 21% Y/Y to 2.57 billion, or 28 million per day. Uber clocked an Adjusted EBITDA of $1.5 billion, driven by Mobility.
Analysts flagged Uber beating the upper limit of the EBITDA guide for the eleventh straight quarter. They also highlighted strong mobility profitability, acceleration in delivery, and increased focus on profits and free cash flow.
Uber stock gained over 63% in the last 12 months, and Lyft gained 98%. Investors can gain exposure to these stocks via the ProShares On-Demand ETF (NYSE:OND) and the Amplify ETF Trust Amplify Travel Tech ETF (NYSE:AWAY).
Price Actions: UBER shares were trading higher by 0.25% at $64.13 premarket at the last check on Wednesday.
Photo via Shutterstock
