Executive Summary

Thousands of Minnesotans earn a living driving for rideshare companies like Uber and Lyft. This analysis measures this workforce’s contribution to Minnesota’s economy today. Using conservative assumptions, we find that each year, Minnesota’s rideshare drivers:

• Earn an estimated $209 million in wages
• Spend $211 million on expenses to support their job
• Foster $561 million in total economic activity across the state 
• Sustain 2,500 jobs beyond the approximately 12,000 Minnesotans who work as rideshare drivers
• Generate approximately $116 million in tax revenue

These earnings belong overwhelmingly to immigrant Minnesotans, many of them lower-income workers for whom driving is a primary source of household income. The money they earn is spent at Minnesota grocery stores, in Minnesota businesses, and on rent and mortgage payments for housing in Minnesota. The money starts in Minnesota communities and recirculates through them. 

Those livelihoods, and the economic benefits they create, are now at risk amidst the push to deploy autonomous vehicles, which threaten to replace these drivers with driverless fleets. If that happens, a substantial portion of this economic activity would be pulled out of Minnesota and funneled into the wallets of Silicon Valley tech billionaires who own the autonomous vehicle companies.

Measuring Rideshare Drivers’ Contributions

Wages earned by Minnesota rideshare drivers are spent close to home. A driver’s paycheck becomes a rent payment, a grocery bill, or a child’s school supplies. Each of those dollars then supports someone else’s livelihood, including the landlord, the grocer, and the small business, who in turn spend it again. Economists call this the multiplier effect, and it is the reason a single dollar earned locally does more for a community than its face value suggests. This study was designed to measure this multiplier effect for Minnesota’s rideshare workforce, using standard and widely accepted economic modeling tools. 

The concern that motivates this analysis is what happens to this economic activity if autonomous vehicles (AVs) are deployed at scale. If AV fleets replace human drivers, many of the dollars that currently circulate through Minnesota communities would instead become returns to shareholders at the technology companies that own the AVs. In plain terms, money that today supports working families and local businesses in Minnesota would be extracted and sent to Silicon Valley. The purpose of this report is to put a number on what Minnesota could lose.

To do so, this analysis relies on IMPLAN, a standard economic impact tool used by economists, corporations, and government agencies across the country. Into IMPLAN, we input Minnesota-specific data on rideshare drivers drawn from a 2024 study commissioned by the Minnesota Department of Labor and Industry (DLI). A fuller explanation of the methodology, including all assumptions and data sources, is provided in our methodological appendix. Of note, the methods used here are deliberately conservative at every step, so the economic benefits detailed in this report should be understood as a floor, not a ceiling. The true contribution from Minnesota rideshare drivers is very likely larger.

Who Are Minnesota’s Rideshare Drivers

To begin, let’s consider who the people behind these numbers are. According to DLI’s 2024 study, 61% of the state’s rideshare drivers are immigrants. In addition, 71% percent are people of color, including 60% who identify as Black or African American. Many of these drivers are also lower-income workers. Rideshare drivers are more than two and a half times as likely as the average Minnesota worker to live in a household below 200 percent of the federal poverty line, and nearly three times as likely to have no health insurance. Many depend on driving as their sole or primary source of income.

Understanding who these drivers are matters because it tells us who would bear the cost of displacement. The livelihoods at stake belong to immigrant Minnesotans with relatively little financial cushion to absorb the sudden loss of their primary income. Moreover, to the extent that these drivers spend their earnings within the communities they come from, it seems plausible that the lost economic activity would disproportionately harm businesses run by people of color and immigrants. 

The Economic Benefits Staying in Minnesota, For Now

The current economic footprint of Minnesota’s rideshare driver workforce can be summarized across a range of areas. Once again, the math underlying these estimates can be found in our methodological appendix.

Driver Wages

Drawing on Minnesota’s legislatively mandated minimum fare standards and estimates of the miles covered by current trips, rideshare drivers earn an estimated $209 million per year. These wages provide one part of the foundation on which the rest of the analysis is built.

Driver Expenses

The wage estimate above reflects the net income of drivers, reflecting the share of pay that they take home and can spend on things like rent and food. An additional share of their income is devoted directly back into expenses associated with their job, such as gasoline, vehicle maintenance, and insurance. Drawing on DLI’s 2024 study, we estimate that drivers spend $211 million on these business expenses.

Total economic activity 

As those wages and money spent on expenses circulate and support activity across the economy, they sustain an estimated $561 million in total economic output in Minnesota each year. This includes tens of millions of dollars for Minnesota housing, health care providers, and car repair shops, among many other industries.

Jobs

Approximately 12,000 Minnesotans were driving for these platforms as of the 2024 DLI study, and the number is very likely higher today as the industry has continued to grow. Beyond the drivers themselves, the economic activity their earnings and spending support sustains roughly 2,500 additional jobs elsewhere in Minnesota’s economy, with more than half of those jobs flowing from the wages spent by drivers.

Taxes

All of this activity generates an estimated $116 million in tax revenue each year across all levels of government. Of this total, $43 million flows to Minnesota state and local governments, funding schools, roads, and public services. The remainder is largely federal, including $30 million in Social Security and Medicare contributions paid by drivers on their earnings.

It is worth noting the additional revenue that the current arrangement leaves on the table. Because rideshare drivers are classified as independent contractors rather than employees, they do not pay taxes into the systems that fund several state programs, including unemployment insurance, paid family and medical leave, and workforce development. Many observers argue that these drivers are misclassified and should be treated as employees. Were that the case, rideshare drivers would generate substantial contributions to these other state programs, strengthening the safety net and the public systems that Minnesotans rely on. While those contributions are not being made today, the deployment of autonomous vehicles would likely remove any possibility of capturing them in the future.

Conservative Assumptions

Every number in this report rests on conservative assumptions. The wage figures are based on the legal minimum pay standard, the floor below which drivers cannot be paid. In reality, drivers likely earn more than this minimum on most trips. In addition, the driver count is drawn from 2024 and is almost certainly higher now. At each step where an assumption was required, this analysis chose the more cautious estimate. The real contribution of Minnesota’s rideshare workforce is, in all likelihood, larger than what is reported here.

What’s at Stake

The figures in this report describe what Minnesota’s rideshare drivers contribute today. They also describe what the state could lose if autonomous vehicles displace this workforce. Should driverless fleets replace Minnesota’s drivers, much of the hundreds of millions of dollars that today support working families and small businesses across the state would instead accrue to the Silicon Valley billionaires who own the AV corporations. Importantly, the Minnesotans who would pay the steepest price are those with the least to spare. The drivers whose livelihoods are on the line are disproportionately immigrant workers in lower-income households. The question facing Minnesota’s policymakers is whether they want to allow a technology owned by a handful of out-of-state corporations to quietly extract hundreds of millions of dollars a year from the state’s working communities, or to act to protect the livelihoods and the local economic activity that this workforce sustains.

Methodological Appendix

This appendix documents how each figure in the above report was derived. It covers the data sources, the assumptions applied, the construction of the model inputs, and the economic impact modeling itself. The analysis estimates the current economic footprint of Minnesota’s rideshare driver workforce, where “current” reflects the statutory minimum pay standard established under Minnesota Statutes Chapter 181C.

• Overview of Approach

The estimates presented were produced in three stages. First, we derived the total annual earnings of Minnesota’s rideshare drivers and the total annual expenses they incur in the course of driving, using data provided in the “Transportation Network Company Driver Earnings Analysis and Pay Standard Options” report commissioned by the Minnesota Department of Labor (hereafter referred to as the “DLI report”). The DLI report was prepared by James Parrott and Michael Reich and was published on March 8, 2024. 

Second, we entered those earnings and expenses into IMPLAN, a widely used input-output economic impact model, to estimate the broader economic activity, employment, and tax revenue that drivers earnings and spending support. Third, we added a hand-built estimate of the direct federal payroll tax paid by drivers on their earnings, which the IMPLAN model does not capture.

Two features of the approach should be understood at the outset. First, the analysis is built from the statutory minimum pay standard rather than from observed earnings data. Minnesota’s rideshare law created no ongoing requirement for companies to report driver earnings data to the state, so no post-law earnings dataset exists. We therefore modeled earnings by applying the enacted statutory minimum pay rates to trip volume and trip characteristics adapted from the DLI report, demonstrating the minimum economic contribution of drivers. Second, as exemplified by this choice, the assumptions used are deliberately conservative throughout our analysis. Where a judgment was required, we consistently chose the more cautious assumption. The resulting figures should therefore be read as a floor.

• Primary Data Source

The foundational data source is the DLI report. That study analyzed more than 18 million rideshare trips provided to the state by Uber and Lyft for calendar year 2022, along with a survey of more than 1,800 Minnesota rideshare drivers. It remains the most comprehensive Minnesota-specific dataset on the rideshare workforce, and nearly all of the trip-level and demographic parameters used here are drawn from it.

• Minimum Pay Rates

Minnesota Statutes section 181C.03 establishes a minimum compensation standard for rideshare drivers, paid on passenger trip time and distance. The rates are $1.28 per mile and $0.31 dollars per minute, with a minimum of $5 per ride. These rates apply to the portion of a trip when a passenger is in the vehicle, referred to as the P3 segment. The statute provides for the rates to be adjusted for inflation beginning January 1, 2027. However, because this analysis was run to model trips in 2025, the original enacted rates apply without adjustment.

• Trip Volume

The DLI report documents approximately 22 million rideshare trips originating in Minnesota in 2023, along with an estimated 9.3 million driver working hours and 237 million miles driven that year. To update these numbers, we grew the 2023 trip volume forward using national rideshare growth as a proxy. In particular, we drew from Lyft’s public financial filings which showed total rides grew by 17% in 2024 and 14% in 2025. Applying these factors to the 2023 figure yields approximately 29.3 million trips in 2025 (including 27.8 million in the Twin Cities and 1.5 million in Greater Minnesota). Working hours and miles were scaled by the same combined factor, holding average trip length constant. We note that this national growth figure is a proxy rather than a Minnesota-specific measurement, though the DLI report does show that trip volume grew 22% from 2022 to 2023, suggesting the national numbers may be conservative relative to possible growth in the state.

• Geographic Split and Trip Parameters

The DLI report finds that 95% of trips originate in the seven-county Twin Cities metropolitan area and 5% in Greater Minnesota, and that trip characteristics differ meaningfully between the two areas. We modeled the two regions separately and weighted them accordingly. The per-trip parameters used, drawn from the DLI report, are as follows. In the Twin Cities metro area, the average trip involves 14.64 passenger minutes and 7.87 passenger miles, with passenger time representing 57.7% of total working time and passenger miles representing 71.7% of total miles. In Greater Minnesota, the average trip involves 10.45 passenger minutes and 4.47 passenger miles, with passenger time representing 45.9% of working time and passenger miles representing 57.2% of total miles.

• Derivation of Driver Earnings and Expenses

Gross earnings per trip were calculated by applying the statutory per-minute and per-mile rates to the average passenger-trip time and distance in each region, subject to the $5 minimum. This yields gross earnings of $14.61 for an average metro trip and $8.96 dollars for an average Greater Minnesota trip. As both exceed the $5 floor, this minimum amount was not applied.

To estimate expenses per trip, we calculated total miles traveled, as drivers incur expenses whenever the vehicle is running (e.g., there is a gas cost regardless of whether a passenger is in the vehicle). Total miles driven per trip (including miles driven without a passenger) was recovered by dividing passenger miles by the passenger share of total miles. For the Twin Cities, this was 7.87 miles with a passenger divided by 71.7% of the time, creating a total mileage of 10.97 miles per trip. For Greater Minnesota, we calculated 4.47 miles with a passenger divided by 57.2% of the time, generating an estimated total milage per trip of 7.81.

We then multiplied this total trip mileage by the Minnesota-specific vehicle and operating cost model developed in the DLI report, which estimated a total cost of 63.83 cents per mile in early 2024. Because our analysis represents 2025, we adjusted that figure for inflation using the change in the federal standard business mileage rate set by the Internal Revenue Service (IRS), which rose from 67 cents per mile in 2024 to 70 cents per mile in 2025. Applying that same proportional increase to the DLI figure (67 cents to 70 cents is a 4.48% increase) yields a 2025 expense rate of approximately 66.7 cents per mile. This rate was applied to total miles driven per trip to secure a per trip expense rate. That provided an expense rate of $7.32 per trip in the Twin Cities and $5.21 in Greater Minnesota.

Having now secured a per trip gross earnings and expense rate, we can subtract expenses from gross earnings to create a net earnings per trip estimate. The result is $7.29 per metro trip and $3.75 dollars per Greater Minnesota trip.

These per-trip figures were multiplied by the regionally weighted 2025 trip volume to produce statewide annual totals (29.3 million trips, including 27.8 million trips in the Twin Cities and 1.5 million trips in Greater Minnesota). The result is approximately $420 million dollars in gross driver earnings, including $211 million dollars in expenses and $209 million dollars in net driver earnings. The net earnings figure is the measure of driver labor income used in the economic impact model.

Creating more specific expense estimates required two steps. First, we created an estimate of total miles traveled, both with and without passengers, recognizing that expenses are incurred for all miles traveled. We began with the 237 million total miles for 2023 provided by the DLI report, and multiplied it by the same 17% and 14% growth rates from Lyft, generating an estimated total mileage of 316.1 million. 

Second, we drew on the DLI report’s cost model (see table on page 10). Each of the components in that cost model were adjusted by the same 4.48% inflation figure derived from the change in the IRS’s mileage rate. These per mile expenses were then multiplied by the 316.1 million total mile estimate, generating approximate annual statewide totals of: vehicle acquisition, $94.8 million; gasoline, $36 million; vehicle maintenance, $32.4 million; insurance, $25.1 million; cellphone and data, $13.6 million; vehicle cleaning, $6.6 million dollars; and licensing and vehicle registration fees, $2.3 million dollars. These seven commodity expense components sum to approximately $211 million dollars.

• Economic Impact Modeling

The economic impact estimates were produced using IMPLAN, a standard input-output model that traces how an initial economic activity ripples through a regional economy. The model distinguishes three types of effect: direct effects (the initial activity), indirect effects (activity generated through supply chains), and induced effects (activity generated when the resulting income is spent by households). The model was run on the Minnesota state region, meaning all results are limited to economic activity generated within the state.

Two sets of inputs were entered. First, net driver earnings of $209 million dollars were entered as a household income, reflecting income received by driver households and subsequently spent. We specifically used code 10003, reflecting an assumption that driver households earn between $30,000 and $40,000. This income range was identified by taking the modeled net earnings per working hour in the Twin Cities metro area ($17.24) and multiplying by 1,750 hours per year, the full-time work schedule (35 hours per week across 50 weeks) used in the DLI report, resulting in an estimated income of $30,170. The resulting figure situates these households in a lower-income bracket, consistent with the DLI report’s finding that a relatively large share of driver households fall below 200% of the federal poverty line. 

Second, the seven commodity expense components were entered as demand for the corresponding industry sectors. Each expense was mapped to its IMPLAN sector under the 528-sector scheme in use: vehicle acquisition to sector 3324 (automobile and light-duty motor vehicle manufacturing); gasoline to sector 3146 (petroleum refineries); vehicle maintenance to sector 3494 (automotive repair and maintenance); insurance to sector 3426 (insurance carriers); cellphone and data to sector 3416 (wireless telecommunications carriers); vehicle cleaning to sector 3495 (car washes), and licensing fees to sector 3513 (other products of state government). The expenses were entered at the prices drivers pay, allowing the model to account appropriately for the portion of each purchase that remains in the Minnesota economy versus the portion that flows to producers outside the state. Again, the economic activity figure we provide ($561 million) only refers to output generated within the state.

The combined results of the two input sets, as produced by IMPLAN, are $561 million in total economic output, 2,486 jobs supported, and $87 million dollars in tax revenue across all levels of government, including $43 to state and local taxes in Minnesota.

Notably, because driver earnings were entered into IMPLAN as a household income change, the drivers’ $211 million in earnings is reflected in the model’s results only through the induced effects it generates, as that income is spent and recirculates. It does not appear separately as a direct effect in the output figure. The practical consequence is that the $211 million dollars in driver wages and the $561 million dollars in total economic output should not be added together. The wages are already embedded within the output figure as part of the activity they generate. 

• Driver Count

Deriving an estimate based on the number of drivers licensed to pick up passengers at MSP airport, the DLI report estimates that 12,000 or more Minnesotans drove for these platforms as of early 2024. Because the figure dates to early 2024 and the industry has continued to grow, the current count is very likely higher. This driver headcount is distinct from, and should not be confused with, the approximately 2,500 additional jobs that the economic impact model estimates are supported elsewhere in the economy, which refers to jobs generated by driver earnings and spending, not the drivers themselves.

• Direct Tax Layer

IMPLAN’s tax estimates capture the taxes generated by the modeled economic activity, but they do not capture the direct income and payroll taxes owed by drivers on their own earnings. We therefore added a separate, hand-built estimate of this direct tax.

For income tax, we applied an effective rate of zero percent at both the state and federal levels. This choice reflects the economic reality of this low-income workforce. According to the Minnesota Tax Incidence Study, the effective individual income tax rate for households in the relevant income range (i.e., $30,1700 per year) is near zero or negative once refundable low-income credits, such as the Working Family Credit at the state level and the Earned Income Tax Credit at the federal level, are taken into account. These credits frequently offset income tax liability entirely for households at this income level. We therefore treat the direct income tax contribution as zero, a conservative choice that avoids overstating tax revenue.

For payroll tax, we applied the statutory self-employment tax rate of 15.3%, which comprises the 12.4% Social Security contribution and the 2.9% Medicare contribution. Because rideshare drivers are classified as independent contractors, they are responsible for the full self-employment tax on their net earnings. Consistent with standard practice, the tax was applied to 92.35% of net earnings. This yields approximately $29.5 million in annual self-employment tax, all of which goes to the federal government.

• Combined Tax Estimate

Adding the direct self-employment tax to the tax revenue estimated by IMPLAN yields a comprehensive tax total of $116 million dollars. Of this, nearly $43 million dollars flows to Minnesota state and local governments, with the remaining $74 million dollars going to the federal government, including the self-employment tax. 

• Summary of Key Assumptions

The principal assumptions underlying the estimate are as follows. Earnings are modeled from the statutory minimum pay standard rather than from observed data, and therefore represent a floor. Trip volume is grown from 2023 to 2025 using national rideshare growth as a proxy, which may understate the growth witnessed in Minnesota. Vehicle and operating expenses are inflation-adjusted to 2025 using the change in the IRS’s standard mileage rate. Trip characteristics and the geographic distribution of trips are held at the levels documented in the 2024 DLI report. Direct income tax is treated as zero based on the effective rates for this income cohort. At each of these points, the analysis favors the more conservative estimate, and the resulting figures should accordingly be understood as a lower bound on the true economic contribution of Minnesota’s rideshare workforce.