Legislative leaders announced a tentative agreement Monday for Uber and Lyft driver pay that is lower than the Minneapolis rate — but the companies aren't on board with it.

Drivers' advocates say they are willing to accept the proposed rate of $1.27 per mile and 49 cents per minute, lower than the Minneapolis proposal of $1.40 per mile and 51 cents per minute. The agreement hashed out between DFL leaders and Minneapolis council leaders came just before the bill's hearing Tuesday in the House Labor and Industry Finance Committee.

"We want to be paid," said Eid Ali, executive director of the Minnesota Uber/Lyft Drivers Association, one of the main groups advocating for drivers' interests. The compromise rates are lower than he hoped, but Ali said drivers want to make a show of good faith.

But spokespeople for Uber and Lyft say they were not part of negotiations between legislators and council members, and said the proposal would push them out of Minnesota.

"[S]hould these statewide rates pass, we would be forced to shut down across all of Minnesota, not just Minneapolis," said Lyft spokesperson CJ Macklin in a statement.

"I think that they're bluffing," said House Majority Leader Jamie Long, DFL-Minneapolis, adding the companies were operating profitably with higher rates of pay elsewhere.

City Council President Elliott Payne said in an interview that he and other council members are excited about the agreement for a statewide minimum that still allows local jurisdictions to set their own rates, calling it a "win" for drivers.

"It's a compromise, but you have to give a little in that scenario," Payne said.

Long said he was pleased the Minneapolis council seemed willing to negotiate down from the rates in the city's ordinance.

The rates in the agreement are slightly more than the higher of two rates proposed in a March report from the state Department of Labor and Industry that aimed to get driver pay to the state minimum wage and give drivers benefits, including paid leave and health insurance. The study suggested that 89 cents per mile and 49 cents per minute would boost drivers' pay to about the minimum wage.

Gov. Tim Walz vetoed a driver pay minimum bill in 2023. A Walz spokesperson called the legislators' deal a "step in the right direction," but indicated the governor wants to keep talking with lawmakers, the companies and Minneapolis leaders.

Uber spokesperson Josh Gold said the company still sees room for negotiation but wants to be part of the discussions. "Right now, the Legislature seems intent to negotiate with the Minneapolis City Council and not us," he said. Joel Carlson, a Minnesota lobbyist working for Uber, said the company was not consulted on this round of talks.

Republicans also slammed the deal, especially after Uber and Lyft said they would not agree to the rates.

"I don't think Uber and Lyft are bluffing," said Sen. Jordan Rasmusson, R-Fergus Falls. "I think there's a real risk that tens of thousands of Minnesotans are the collateral damage of this reckless policy."

While council members want Uber and Lyft to stay in Minneapolis, Payne said the goal is for drivers to make a minimum wage.

"This isn't about negotiating some amount that they agreed to, this is about coming up with a rate that best captures the real expenses experienced by everyday drivers," Payne said.

Ali, of the drivers' association, said the agreement was not perfect. But he wanted drivers to get something this year, after the disappointment of Walz' veto last year.

Both Ali and Mohamed Egal, who leads the separate Mulda Members Organization for drivers, said they would be happy with the proposed rates.

Neither was concerned about what would happen if Uber and Lyft leave Minnesota, and hoped for more competition to emerge, whether from outside companies, a local drivers' cooperative or even taxi apps.

"We want to make sure we are getting competition into the market so we don't have the same problems we have had in the past, which is a duopoly in Minnesota," Ali said.

Staff writers Louis Krauss and Briana Bierschbach contributed to this report.